Bank base rate holds as mortgage rates begin to fall
Author: Andy Bedford » Publish Date: 11 September 2009
The Bank of England announced yesterday that the bank base rate will remain static at 0.5% for another month, which is good news for the housing market, prospective borrowers and mortgage brokers.
In conjunction with massive falls in the London Interbank Offered rate recently and small falls in swap rates, the stage looks set for continued reduction in mortgage interest rates over the coming months.
HSBC and Lloyds Group announced large rate cuts in the lower loan-to-value range last week, and over the past few days, several lenders have announced changes to rates and criteria higher up the loan-to-value range.
While there has been little change in higher loan-to-value rates in the 80% and upwards category, there is a feeling among the mortgage advice community that things will now start to ease here too. Perhaps for remortgages in the first instance, but potentially for new purchases also.
Whilst it’s unlikely we will see any products at 95% for new purchase soon, things appear to be moving in the right direction, which can only be good news for homeowners and the economy at large.