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Mortgage rates plunge to historic lows – Moneyfacts

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20/02/2013
Mortgage rates have fallen to their lowest ever since the introduction of the Funding for Lending Scheme, said Moneyfacts.

Two, three and five year average fixed-rate mortgages were at their lowest since the products were introduced twenty four years ago – a two year fixed-rate product in June 1989 would have had an average rate of 12.83%.

Moneyfacts editor Sylvia Waycot said: “At last we have some good news to talk about with regards to finance; fixed mortgage rates are coming down.

“Of course, this doesn’t mean it will be any easier to get a mortgage approved, you will still need to have a clean credit record, income sufficient to not only pay today’s mortgage rate but also potential future increases and of course the stickler for most, the deposit.

“But if you can satisfy the banks’ lending criteria and have a deposit or equity from a current house, then there are some amazing offers to be had.”

The news comes as Bank of England contacts in the housing market report that Funding for Lending continues to spur optimism about house seller activity in 2013.

It stated: “Housebuilders and estate agents report tentative signs of a gradual increase in housing market activity, with some contacts seeing an increase in buyer interest and in transactions.

“That was said partly to have reflected falls in mortgage rates and an improvement in mortgage availability, albeit one that was patchier at higher loan to value ratios.”

The Chelsea and Nationwide building societies top the rates list for two and three year fixed-rate products respectively.

Barclays plans to cut rates tomorrow on some of its fixed-rate residential mortgages by up to 21 basis points, allowing it to offer its lowest ever five year fixed-rate at 2.99% with a £999 fee.

AVERAGE FIXED RATE MORTGAGES

  FEB 09 FEB 10 FEB 11 FEB 12 FEB 13
 5 YR 5.67% 6.00% 5.41% 4.64% 4.14%
 3 YR 5.56% 5.47% 5.05% 4.63% 4.36%
 2 YR 4.88% 4.82% 4.49% 4.36%

4.11%

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