Mortgage rates drop to seven year low

| June 23, 2010 | 0 Comments
Mortgage rates drop to seven year low

Mortgage rates are at their lowest for seven years, according to new research.

The study by Moneyfacts.co.uk found the average interest-rate on a two-year fixed rate mortgage is 4.52%, the lowest since September 2003.

Interest rates on fixed rate mortgages have been dropping since September last year as lenders attempt to entice borrowers away from low standard variable rates (SVRs).

“Many borrowers are opting to remain on record low SVRs and overpaying their mortgage rather than secure a new deal at a higher rate,” said Michelle Slade, Moneyfacts.co.uk spokesperson.

“Lenders are trying to incentivise borrowers onto new fixed rate deals by making significant cuts to rates.

“Previously, only deals for borrowers with large deposits were seeing cuts, but as the market improves borrowers with smaller deposits are being offered more competitive deals too.”

Earlier this week, Rightmove published figures showing property values in England and Wales increased just 0.3% in the five weeks to 12 June 2010.

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