Interest rates stable in September

Fiona Wilson from the Mortgage Advice Bureau comments on the Bank of England’s decision to retain the Bank Base Rate at half of one percent for the eighteenth consecutive month.

“Few will be surprised to see the Bank Base Rate maintained at 0.5% for yet another month. Although the economic growth rate was recently revised upwards to 1.1%, inflation has just started to fall back so it was no surprise to see the bank retaining their cautious, wait and see approach!

It is expected that some government departments will face significant reductions in their budgets. This will result in job losses and a tightening of belts as individuals’ disposable incomes are squeezed as the planned tax rise kicks in early next year.

Now that the summer holidays are largely consigned to a photographic memory, we have seen a substantial increase in the choice of mortgage products available with lenders. Mortgage product numbers in the first week of September were at a year to date high of more than 4,700 deals, an increase of approximately 1,000 products in a little under two months and also surpassing product numbers available at any point in 2009. This is good news for borrowers as a greater choice means more competitive products for anyone looking to buy or those looking to remortgage.

The price of the average 2 year fixed rate mortgage in September as reported by Moneyfacts is 4.55%, down from almost 5% (4.93%) at the end of 2009 and the average 5 year fixed deal has continued to reduce, now down to 5.56% from more than 6% (6.15%) in December 2009.

As a result of fixed rate deals having reduced in price over several months, it seems their appeal to borrowers has increased with more than 60% of buyers opting to fix.”

Fiona Wilson is from the Mortgage Advice Bureau working with Jonathan Waters Estate Agents, for further information on how the latest base rate decision affects you, please call Fiona Wilson on 01473 721133 or 01473 281188, or via our website

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