When asked at what point the base rate will fall to its lowest level, the most popular prediction was March 2009. Only 8% of the population thinks that tomorrow's predicted rate cut will bring the rate down to its rock bottom.
With this in mind, it is not surprising that Britain's borrowers may have been looking out for lower rates until they are willing to fix their mortgage. The average rate Brits are willing to fix their mortgage on for a three year period is 3.86%, only marginally lower than the currently lowest three-year fixed rate of 3.99%, suggesting that we may see a remortgaging frenzy if fixed rates drop just a little bit further. More than one in three (35%) borrowers are even holding out for three-year fixed rates of 3% or below before they are happy to fix their mortgage.
But it may be difficult for the nation's borrowers to be confident about their mortgage decisions in the current climate. Almost one in four (23%) people state that today's ‘mortgage maze' meant that they were less confident than only 12 months ago in choosing a new mortgage deal without professional advice. This is in addition to a sensible 28% who say they would never choose a new mortgage without advice.
David Elms, chief executive of Unbiased.co.uk, comments: "Even without a further rate cut tomorrow, interest rates are now 4% lower than just 12 months ago. With rates so low, and further cuts likely to have been priced in by lenders, borrowers need to ensure they don't lose out by holding out too long for falls which may not come.
"In today's fast-changing mortgage market, borrowers can no longer count on general rules, and this is where the value of personal, expert advice becomes clearer than ever. With interest rates still removed from the mood in the money markets, and lenders adopting an array of strategies to ride out the credit crisis, we have seen borrowers' boom-time self-confidence ebbing away. The risk of losing out by making an uninformed decision or not having access to product deals from the whole of the mortgage market are greater than they might normally be."
