Tracker and SVR mortgage rates fall to five-year low

Latest figures from the Bank of England show that rates on new tracker and standard variable rate loans have fallen in recent weeks, however those with less than a 25% deposit remain locked out of the best deals.

Tracker loans are linked to the base rate and at the end of December, the cost of the average two-year tracker with a 75% loan-to-value (LTV) ratio had fallen to 4.95% compared to 5.78% in November.

The average was down to a level last seen in January 2004, having dropped back from a peak of 7.04% in October.

Rates on standard variable loans were down to an average 5.38%, the lowest since November 2003.

Fixed-rate mortgages have also followed the trend; in December, the average rate on a 75% LTV two-year fixed-rate deal stood at 4.79% and for a five-year fixed-rate, 5.31%.

Later round-ups of average rates could be even more appealing because the December figures do not take into account two cuts in the base rate, which is down from 3% in November, to 1.5%.

So far, HSBC, Lloyds TSB and Nationwide are passing on January’s 0.5% cut in full while Halifax and Royal Bank of Scotland have opted to reduce their standard variable rates by 0.25%.

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