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The attitude of borrowers is changing as mortgage rates have started to nudge down, according to Yorkshire Building Society (YBS).
For large parts of 2008, borrowers coming to the end of two and three-year mortgage deals have been increasingly staying on their lender’s standard variable rate (SVR) because the new fixed and tracker rate options were proving too expensive.
Rates are now well below 6% as the cost of interest rate swaps used to price fixed-rate mortgages has declined. As a result Yorkshire Building Society recently reduced rates on its fixed-rate mortgage range by up to 0.55% and has since seen application levels double.
Tom Girling, mortgage product manager for YBS, said: “Now that there is clear water between typical SVRs of over 7% and the best two-year fixes, it has focussed borrowers’ attention on getting their monthly costs down.”
The October 2008 issue of Your Mortgage is on sale now and comes with a free guide to remortgaging. You can also find out how lenders decide how much you can borrow and we take a look at the two main ways to repay your mortgage. Get your copy now for the latest news, information and help for those looking for a mortgage or buying a new home.
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