Mortage rates lowest for decades
Posted on 5th July 2011
MORTGAGE rates have fallen to their lowest level for more than TWO DECADES — but experts claim they should be even lower.
Rates for home loans have tumbled, a survey shows, as the Bank of England keeps its base rate at 0.5 per cent to boost the economy.
But experts say banks and building societies are failing to pass all the savings on.
The average two-year fixed deal is now 4.32 per cent while a two-year tracker is 3.37 per cent.
But MONEYFACTS claim home buyers should be getting even better deals. They say the profit margin for banks and building societies is at the highest level since December last year.
Spokeswoman Michelle Slade said: "A reduction in funding has led to average mortgage rates falling to their lowest level since Moneyfacts started recording rates in 1988.
"Unfortunately for borrowers, lenders don't appear to be passing on the full fall in the cost of funding to lower mortgage rates.
"Lenders are always slower at bringing rates down than they are at raising them.
"And as soon as the market expects an interest rate rise, mortgage rates will start to increase again."