12 Jul 2016
Mortgage rates fall to new lows
Mortgage lenders across the UK are slashing their interest rates in the wake of the Brexit vote as numerous economists forecast a cut to the Bank of England base rate this week.
Despite Chancellor George Osborne’s warnings that Brexit could see mortgage interest rates on the ruse, the opposite appears to be happening, with a number of lenders cutting rates on their fixed rate mortgage products.
The lenders that have reduced their rates so far include Barclays, Metro Bank and HSBC, among others.
Among the deals now on offer is the lowest ten year fix ever to be available, a deal from Coventry Building Society charging interest at just 2.39%. The loan requires an upfront fee of £999 and a maximum loan to value of 50%. Coventry are offering another deal for borrowers who want to pay a smaller deposit; a ten year fix at 2.49% with a maximum loan to value of 65%.
These drops to fixed rate plans come as many are expecting the Bank of England’s base rate of interest to fall in the not too distant future.
Mark Carney appeared to indicate last week that a cut to the base rate is on the cards soon, as the Bank of England sets in motion a number of measures to prepare the economy for any imminent upset following the vote to leave the EU.
Senior economist at Hargreaves Lansdown, Ben Brettell, said: “Following on from Mark Carney’s strong hint last week that rates will be cut this summer, financial markets are now pricing in a 78% chance that this will happen next Thursday”.
He added, “Initially August had looked more likely, but with economic data deteriorating and markets still nervous, it now looks probable the MPC will adjudge that immediate action is warranted”.
Analysis completed by Hargreaves Lansdowne shows that if a rate hike doesn’t happen on Thursday, then there is an 86% chance that it will happen by August, and an 89% chance by December.
However, with such a fast moving market, lenders are urging borrowers to act quickly to take advantage of low rates. Contact deVere Mortgages today to secure your dream home!