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Saturday 25th of July 2009
July 22, 2008

Average two-year fixed-rate drops below 7%


by Gill Montia
Average two-year fixed-rate drops below 7%

Moneyfacts.co.uk has announced that the average interest rate on a two-year fixed-rate mortgage has fallen to 6.96%.

Market swap rates have soared in recent months, taking rates on this popular type of loan to a ten-year high of 7.08%.

However rates on the two-year and other fixed deals are now falling. In the case of the three-year fix, by 0.12% and on the five-year fix by 0.06%.

In the past fortnight Halifax, Abbey, Cheltenham & Gloucester, Nationwide and Woolwich have reduced rates and Moneyfacts mortgage analyst, Michelle Slade, recommends shopping around because there are signs of competition returning to the market.

She also comments that lenders have been quick to pass on increases but not all have hastened to lower rates as conditions on the money markets began to improve.

However, Ms Slade says it is too early to say whether the mortgage market has turned the corner, although there has been a modest rise in the number of mortgage products available.

According to the financial website, 3,403 products were on offer at the end of June, increasing to 3,887 today.

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