Lenders Reduce Fixed Rates for Mortgage and Remortgage Borrowers
The Bank of England chose to leave the base rate last week at 0.5 per cent. Lenders are trying to attract borrowers after the numbers came in from June showing less applicants were coming in for mortgages and there was only a slight rise reported in those seeking remortgage. This is good news for consumers since Banks have chose to respond by lowering fixed rates for mortgages and remortgages.
Santander has dropped fixed-rate loan costs by up to 0.2 percentage point. The five year fixed rate is now 5.25 from 5.44 per cent for new home borrowers with 25 per cent deposit and for remortgage seekers with 25 per cent equity in property. Rates dropped for two-year fixed rate also. Northern Rock, ING Direct and Skipton Building Society reduced their fixed rates as well. There had been an expectation that talk about a base rate increase would occur, but it is not expected to change until 2011. Only if inflation increases more than analysts expect due to the Budget cuts do they believe the rate will change before then. Lenders reducing their fixed rates was a nice surprise for mortgage and remortgage seekers.