Mortgage rates in the UK have fallen to record lows, according to the Mortgage Advice Bureau.
Indeed, compared to February 2015, borrowers are paying up to £600 less each year.
Average rates for two and three-year fixed mortgage deals have fallen to the extent that consumers are able to save hundreds of pounds on their mortgage repayments each year, as the prospect of a Bank of England rate increase diminishes.
Three-year fixed rates have now dropped below 3 percent for the first time, with borrowers paying as much as £53 a month less than a year ago.
The Index also shows that consumers can also choose from the highest number of mortgage products since 2008, with over 17,600 on the market – up 36 per cent year-on-year.
Fixed mortgage rates fall further in the UK
19th February 2016
Fixed rate mortgages fell to their lowest levels in 2015, whilst the standard variable rate remained static, according to Halifax, which meant that the potential savings for borrowers improved significantly over the course of the past two years.
Indeed, the average interest rate on a new fixed rate mortgage fell a further 0.591 over the past 12 months, which left the average fixed rate at 2.66 per cent compared with the average standard variable rate of 4.49 per cent. The gap between them both has widened by 1.81 percentage points since August 2012. As a result, homeowners could be saving 50 per cent more by switching to a fixed rate deal than two years ago.
In November 2013, the average monthly payment of a homeowner who took out a two-year fixed rate on a £100,000 mortgage would have been £485. At the same time, the payment on a standard variable rate mortgage would have been £551 – a monthly saving of £66. A borrower taking out a fixed rate in November 2015 would be paying £457 a month on a £100,000 loancompared with £555 on the average standard variable rate – a saving of £99 a month; 50% higher than two years’ earlier.
“With base rate remaining at record low levels for another year, fixed rate mortgages fell further in 2015. Over the past three years average rates have fallen sharply, significantly widening the gap between them and standard variable rates. As a result, borrowers have been able to make considerable savings,” comments Craig McKinlay, Mortgages Director at Halifax.
“Whilst remortgaging activity has picked up in the last year, this is only in line with new loans. As a result, remortgage activity’s share of all lending has remained relatively subdued, especially when compared to its strength in 2008. Without the concern of a base rate rise in the immediate future it seems borrowers’ appetite to remortgage has been dulled, meaning that some could be missing out on significant savings.”Google+