Mortgage rates reach levels seen in 2007

Recent data has shown that mortgage interest rates amongst lenders have been falling recently as a result of a drop in swap rates, which is the rate at which banks lend to one another. Officials recently stated that mortgage interest rates had dropped back down to almost the same levels as they were in the summer of 2007.

Officials from Moneyfacts, which carried out the research, said that the average interest rate on a two year fixed rate deal was now 6.59%, which is just a little higher than the 6.56% rate on the same mortgage product as seen last summer. With swap rate having fallen an increasing number of lenders have been dropping their mortgage interest rates.

However, it is not all good news for borrowers, as although mortgage interest rates have been falling some of the other costs associated with mortgages have been rising, and this includes deposit levels and arrangement fees, which has made it even harder for borrowers to get a mortgage.

Many people are now looking at a minimum deposit of around 20% in order to get the most affordable mortgage interest rates according to reports, and one industry official stated: “The pricing is getting back to where we were a year ago, but the appetite for lending is diminished.”