Better news for consumers with regards to mortgages

Some consumers have recently had good news with regarding to mortgage affordability, after a number of lenders decided to reduce interest rates in line with the base interest rate, which has now dropped to its lowest level in the history of the Bank of England, at just 1 percent. For some consumers this has resulted in greater choice and increased affordability when it comes to getting a mortgage.

Some lenders have also decided to start offering mortgage with very low fees or even fee free mortgages, savings some borrowers even more money and providing them with even more choice when it comes to mortgages. Borrowers that are able to get these lower cost mortgages could save money on their repayments due to lower interest rates and could save money on costly arrangement fees.

An official from Abbey said: ‘Many borrowers are looking to lock into a competitive fixed rate in the current economic climate to guarantee certainty of their monthly payments. Demand for three-year fixes has trebled since November and we’ve responded with the launch of a highly competitive range to meet borrowers’ needs.’

However, officials have warned that these low interest fee free deals are not available for all borrowers, and usually only those with a high level of deposit to put down will be eligible to qualify for the deals. This means putting down a deposit of between 25 and 40 percent depending on the lender, which means that many first time buyers will not benefit from the lower rates and better deals.