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First-time Buyer

Mortgage rates fall back to ‘lowest ever levels’

Kit Klarenberg
Written By:
Kit Klarenberg
Posted:
Updated:
04/11/2015

Home owners looking to get the best possible deal should consider fixing their mortgage now while providers are cutting rates, according to MoneySuperMarket.

The comparison site said average fixed term mortgage rates have crept down to some of their lowest ever levels, despite some lenders raising rates in the last few months amid speculation of a base rate rise next year.

The average rate for a five-year fixed deal currently stands at 3.45 per cent, while last year it was 4.06 per cent, and in 2012 it was 4.67 per cent.

Shorter term mortgage deals also follow the same pattern, with the average three-year fixed rate coming in at 3.21 per cent today, compared to a rate of 4.8 per cent in 2012. Similarly, the average two-year fixed mortgage rate is now 2.9 per cent, whereas it was 4.48 per cent in 2012.

There are a record number of mortgage deals to choose from at the moment, MoneySupermarket said.

This month, there are 41 ten-year fixed rate products on the market, compared to 35 last month.

“Mortgage lenders are doing a U-turn, decreasing rates again after hiking them over the last couple of months,” said Dan Plant, consumer expert at MoneySuperMarket.

“Even though the Bank of England base rate hasn’t risen yet, it’s still a case of when rather than if, so any homeowners looking for a cheaper deal should take advantage of current low rates. Many lenders allow mortgage holders to reserve rates available now for up to six months for a small fee, so even those who still have some time left on their current deal can benefit.

“However, you should never rush into mortgages – after all, for most of us it’s our biggest single spend every month. Before taking out a mortgage, it’s vital to work out the total cost over the term of the deal, taking both rates and fees into account. Expensive fees can wipe out the potential benefit of a lower rate, so do the sums first to ensure you really are getting a great deal. The good news is we’ve seen fees decrease over the last four years, especially for five year fixed deals, meaning it’s a cheap time overall to be looking around. ”

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