GEMHL’s survey revealed that 61 per cent of brokers felt interest rates would end the year between 5-5.4 per cent, while one in 10 brokers predicted rates would reduce to below 5 per cent.
In reaction to this, GEMHL has unveiled its discount deal via its First National brand. The mortgage will be available to purchasers and remortgagers classed as near-prime plus, while near-prime clients can access a three-year discount at 7.34 per cent.
The maximum loan-to-value (LTV) is 95 per cent and 90 per cent for self-cert applicants.
Gerry Bell, head of mortgage marketing at GEMHL, said: “Discounted rates are likely to become more popular throughout 2008, so we have responded to this demand with the launch of a range of discounts.
“Consumers and brokers alike will be looking for a reduction in rates to ensure purchases remain affordable.”
Ray Boulger, senior technical manager for John Charcol, said: “GEMHL is right that the market is increasingly variable rate rather than fixed. While I agree in principle with the discount, in practice, its fixed rate may well be better value.
"Although the deals go up to 95 per cent LTV, they are only higher lending charge free up to 85 per cent making it that much more expensive. But it’s worth congratulating First National for at least still offering up to 95 per cent.”
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