Remortgages and mortgages for new purchases are at some of the best rates ever seen with historical lows for fixed rates at below 3%.  While the very lowest rates are attached to loans with low loan to value (LTV) levels between 40% and 50% there are still very attractive rates on loans with higher LTVs.  The slightly higher interest rate levels with higher LTVs also have lower fees or no fees and many have free incentives which could make them the better choice than the lowest interest rates.

The interest rates offered by lenders are currently at their low level as lenders are competing for borrowers.  The government launched a programme to keep funds flowing to borrowers and to keep interest rates low.  The programme offers low interest rates from the government to lenders for their loan funding which allows them to escape the global lending market.  As lenders took advantage of the Funding for Lending scheme they were able to drop their interest rates and those borrowers that were ready and could obtain lending did so.

Rumors circled that the Bank of England’s Monetary Policy Committee might drop their standard base interest rate but those rumors were quickly put to rest by economists.  It is possible that many borrowers hoped to see the rates drop further and stayed away for the levels of mortgage lending have failed to reflect the very good deals being offered.  However, there is the possibility that many are still unable to get lending despite the attractive rates.  Many homeowners are dealing with low equity levels and negative equity levels and deposits are still hard to come by for hopeful homebuyers.

Experts expect that remortgages and mortgages for purchases will remain low for some time and therefore borrowers should put in the effort to seek counseling, the help of brokers, or seek a conversation with their current lender to get them closer to one of the attractive deals currently being offered.