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No slowdown in mortgage price war

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
13/02/2015

The mortgage price war shows no signs of waning as lenders battle for new business, according to a leading mortgage broker firm.

 

Mortgages rates have continued to fall at the start of 2015 with a number of lenders cutting rates. New entrants to the market have also increased competition in the sector.

Research released by the Bank of England earlier this week showed the average two-year fix is now on offer at just over 2% while lenders such as HSBC have a sub-1% product available.

Brian Murphy, head of lending at Mortgage Advice Bureau, said he expected mortgage rates to continue to fall in the short-term. He said borrowers with deposits of any size could make savings by remortgaging.

“There is no sign of any slowdown whatsoever in the mortgage price war,” he said. “Lenders have begun the year with a strong appetite for growth, and newcomers are going head-to-head with established names to launch attractive new deals.

“Rising competition is pushing pricing to new lows, and it means consumers can choose from record-breaking fixed rate deals regardless of whether they have a 5%, 10% or 25% deposit. There has also been a seismic shift in the average two year variable rate at 75% loan-to-value, which has fallen by 112 basis points over the last year to 1.64%: a price cut of more than 40%.”

However, he urged borrowers to act fast as once rates begin to rise it is unlikely they will return to this level in the foreseeable future.

“The next six months are shaping up to be the best-ever window to secure a low interest rate if you are looking to buy or remortgage,” he added. “Today’s prices have never been bettered in modern times and given that a base rate rise is inevitable at some point, it is unlikely they will be surpassed in the years ahead.”