Recent weeks have seen mortgage lenders competing to attract borrowers with the result that the mortgage deals on offer continue to improve. This week moneysupermarket.com indicated that the average 2 year fixed rate is at its lowest level since Base rate hit its historical low of 0.5% in March 2009.
Lenders have seen money market costs falling and have consequently been able to pass that on to customers by improving their mortgage deals. Refreshingly, lenders have reacted aggressively to other lender’s interest rate cuts in a bid to compete head to head.
Lenders such as Northern Rock, Woolwich and Santander have all cut mortgage rates in recent weeks – not just once but several times. Santander has even been offering limited edition ‘specials’ that only last a week. The cuts keep on coming and Nationwide has joined the fray in launching a market-leading 5 year fixed rate mortgage at just 3.89% from tomorrow. Skipton and Santander are also improving their rates.
Lenders are also increasingly offering mortgage options for those unsure as to whether they should opt for a low variable deal or fix in now to protect against future rate rises. Switch to fix options that allow a borrower to move, without penalty, from a tracker to one of their lender’s fixed rates are increasing in number. Capped trackers are also an option, benefiting from currently lower variable rates but only able to rise to a certain level.
Increased competition is good news for borrowers and can only improve the mortgage rates on offer – opening up more opportunities for homeowners to save money or protect themselves against rate increases in the future.