This is according to MoneyExpert.com which says in the last three months the number of fixed rate mortgage deals charging interest under 4% has more than doubled from 55 in February to 120 now.
And interest rates have also dropped in the past 90 days, according to MoneyExpert.com. The average fixed rate deal across all terms has fallen from 5.37% to 5.17%. Longer term mortgages have seen the most dramatic price drops – MoneyExpert.com research shows that the average four year fixed rate mortgage has decreased in price from 5.55% in February to just 4.88% now. Three year and two year mortgages have also seen average interest rate drops of 0.34% and 0.22% respectively.
Recently both the Bank of England and the Council of Mortgage Lenders have reported rises in mortgage approvals for home purchases and some lenders have seen average prices stabilising. The UK’s second biggest lender Abbey has increased to 70% the maximum loan-to-value on all deals that were previously limited to a loan-to-value of 60%.
MoneyExpert.com says banks are responding to the improving market conditions by offering cheaper mortgage deals – and more of them. Pierre Williams, head of research, MoneyExpert.com, said: “It’s early days but the banks might just be coming out of their shells. It’s not the end of the recession but it might just be a sign that the worst effects of the credit crunch are over.”
