The front page of today’s Daily Express revealed that rock-bottom interest rates have forced mortgage costs down to their lowest level for two years- and even cheaper deals are on the way. According to figures from the Bank of England the average tracker mortgage rate dropped 1.5 per cent to 5.84 per cent at the end of November, down from 7.04 in October. Furthermore, two-year fixed-rate deals for new borrowers with a 25 per cent deposit also fell from 5.82 per cent to 5.11 per cent, their lowest level since September 2006. Despite these encouraging statistics, the paper explained that borrowers with small amounts of equity in their homes are still being penalised with inflated mortgage rates, because lenders remain unwilling to approve riskier loans. The Daily Mail suggested that homeowners who have locked their mortgage repayments for more than two years may be better off paying hefty early exit penalties and swapping to one of the new cheap deals being launched. The London & Country website has a calculator that lets you enter your current loan size, and redemption charge. It will then work out what rate you would need to make a saving over the remaining term.
Finally, the Daily Mirror had a piece that asked why lenders still won’t trade with rivals, are failing to pass on rate cuts and have slashed savings rates. In addition, the average new buyer needs a 17 per cent deposit- the highest since 1980.