Home.co.uk
Home.co.uk

News: Higher Fixed Rate Mortgage Deals 'Defy Logic'

Wed, 12 Nov 08

Fixed rate deals are still around 0.75% higher than a year ago, despite the Bank of England’s recent cuts in interest rates.

Latest figures from mortgage information firm Mform show that the best fixed rate deals for borrowers with a 10% deposit are around 6.44%, compared with an average of 5.69% in November last year.

This comes in stark contrast to a near halving of the Bank of England’s base rate during that time, from 5.75% to just 3%. Also the Libor rate, the rate at which banks lend to each other, has also plummeted during that time from 6.6% to 4.49%.
Francis Ghiloni, Mform’s marketing and business development director said: “It defies logic that the best fixed rate deals for first-time buyers are currently more expensive than a year ago when base rates have been cut so dramatically.
“However the events of the past few months have shown that logic does not currently play much of a role in the UK mortgage market. On the face of it lenders are enjoying very comfortable profit margins and could make substantial cuts.”

Mform’s figures also show that fees are beginning to fall. The best deals carried fees of around £999 in November last year. This has dropped to around £599.

 

By Joe Lepper

See also  - Mortgages

Back to: News Index