The lowest mortgage rates on record and the most choice since 2008
Like the odds of Leicester City winning the Premier League title, mortgage rates in the UK continue to fall as the threat of an interest rate rise depletes.
The fall in mortgage rates comes after the Monetary Policy Committee (MPC) voted unanimously to keep the Bank of England Bank Rate at 0.5% for the 84th month in a row in March.
Two and three-year fixed rates were among the biggest movers, with the average three-year rate falling 0.09% and the average two-year falling 0.02%, according to the Moneyfacts Average Mortgage Rate ™.
Why are prices falling?
Experts in the market, including the shadow MPC, are now predicting a rise in rates to occur around 2018, with some suggesting as late as 2020, and this is giving lenders the confidence that consumers will be able to make their payments on their mortgages more easily for longer.
This comes as good news for both potential buyers and current home-owners that are looking to remortgage their properties as they can look to lock into new deals with lower mortgage rates to pay lower monthly repayments before the rates do rise.
Low mortgage rates look set to stay for some time, and there is an appetite among lenders for business, leaving consumers in a good position to reap the benefits of the increased competition.
Do I have more choice now?
Our own research shows that, when compared to the same time last year, a borrower that took out a two-year fixed rate in February made an average saving of £53 per month in repayments, and with more mortgage products being on offer, consumers are continuing to benefit.
There was also a 3% rise in the number of mortgage products available to consumers in February, which is obviously great news for potential borrowers as advisers now have a greater choice of products to choose from to match to their needs.
Whilst the average two and three-year deals are at record lows, buyers with larger deposits are still set to obtain the biggest rewards, with lower loan-to-value mortgages attracting the better deals from lenders.
With all of the low interest rates around, now could be the time to remortgage or buy your first home. However, with tougher affordability criteria and varying rules in the mortgage world, seeking advice from a professional mortgage adviser is imperative in ensuring that you get the deal that is right for your circumstances.