Cuts applied to two year fixed rate mortgage deals

According to recent reports the cost of two year fixed rate mortgage has been cut to less than 3 percent, with lenders said to be in the midst of a private price war. The battle between the lenders has proven to be good news for borrowers, as it has helped to trim down the cost of their mortgage interest rates so that consumers can get a great deal.

However, borrowers are being warned that in many cases the low rate fixed deals are only coming to market for a short period of time such as five days or so, after which point they are withdrawn from the market. This means that those looking to get their hands on a low cost fixed rate mortgage will have to act quickly in order to avoid missing out on the deal.

Yorkshire Bank, Barclays, and Alliance & Leicester are said to be amongst the lenders that are currently offering interest rates below 3 percent on their fixed rate mortgages. Those that do want to opt for these low rate fixed mortgages will, however, have to be mindful about the deposit level that lenders are demanding in order to provide access to these mortgage deals. This can vary from one lender to another, and in some cases the deposits required may be quite high.

One mortgage broker said that the decrease in interest rates was good news for consumers, especially those that had been wondering whether going for a fixed rate was really a good idea with the base rate at just 0.5 percent.

He stated: ‘The knock-on effect of these price changes is that rates in the tier above this are also getting that little bit cheaper. It’s pretty good news for all.’