Fixed mortgage rates are dropping like stones, Moneyfacts research reveals. Rates started a slow descent shortly after the Government’s Funding for Lending Scheme (FLS) began last August and have picked up speed with new ‘best ever’ deals coming onto the market almost daily.

We are currently experiencing the lowest two, three and five year average fixed rate mortgages seen since their launch in 1989.

Bank of England Base Rate fell to its current historic low in March 2009; four years later and it has been matched with historically low mortgage rates too.

Not only are averages in freefall, many individual providers are joining the downward race with gusto as those that have joined the FLS must increase their loan books or face stiff penalties.

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“At last we have some good news to talk about with regards to finance; fixed mortgage rates are coming down.

“Of course, this doesn’t mean it will be any easier to get a mortgage approved, you will still need to have a clean credit record, income sufficient to not only pay today’s mortgage rate but also potential future increases and of course the stickler for most, the deposit.

“But if you can satisfy the banks’ lending criteria and have a deposit or equity from a current house, then there are some amazing offers to be had.

“Recent criticism levied at banks was that they were offering the best mortgage deals in the less risky 60% loan-to-value (LTV) tier. It is good news on that front too, as some very attractive higher LTV loans are at last entering the market.

“To put the current rates into context, if you had opted for a two year fixed in June 1989, you would have paid an average rate of 12.83% (the least competitive rate was a breath stopping 13.20%). A five year fixed averaged out at 12.85%”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.