Fixed rate mortgages become more competitive
After a year of rising interest rates, and with house prices continuing to soar, there is finally some light at the end of the tunnel for property purchasers in the UK, according to a recent report. According to reports a number of mortgage lenders in the UK have announced that they are brining down the rates on their fixed rate mortgages, although in many cases this is only a slight drop. However, it does suggest that perhaps interest rates are unlikely to rise again in the imminent future, which could mean that homeowners won't need to worry about rising repayments just yet. It also means, of course, that buyers can enjoy a more competitive deal on their fixed rate deals, thus eliminating the worry of further interest rate rises.
The Halifax, the Royal Bank of Scotland, and the Britannia are amongst those that have announced cuts in the interest rates on their fixed rate mortgages. This is also good news for consumers who already have fixed rate deals that are due to come to an end in the coming weeks, as it means that they will be able to move onto another fixed rate deal without having to pay way over the odds although the rates are likely to be significantly higher than the ones that they may have on their existing fixed rate deals due to recent interest rate movement. Many are hoping that the drop in fixed rates means that the base rate has peaked.
According to one industry expert: "It is too early to say with any degree of confidence whether interest rates have peaked. We are approaching levels at which it may be possible to think interest rates may stabilise or at least rise more slowly but the bias is that risks are still to the upside. This level of interest rates does seem to be restraining the economy and there are signs that consumer demand is slowing. The signs are that with markets a bit bouncy the Bank of England is being a bit more patient."
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