Boulger predicts that with falling fixed rates, and the strong
likelihood that Base Rate has peaked, most mortgages will become even more affordable.
"Mortgages are to become even more affordable over the coming months. With fixed rate loans having fallen by half a per cent in the last four months and Base Rate probably at its peak in this interest rate cycle, monthly payments are likely to become more manageable for the UK's mortgage population.
"Consumers who have not been on a fixed rate over the last 12 months have been used to receiving letters from their mortgage lender advising that their monthly payments will be increasing. Someone with a £150,000 repayment loan will have seen their payments rise by approximately £120 a month in this time and for those with an interest-only loan the rise will have been even more, approximately £160. Yet, it appears this trend is about to be reversed, with fixed rates already falling, and Base Rate likely
to follow," Boluger said.
He added: "In July 2004, the best two-year fixed rate was 5.19 per cent. The best deal is now over half a per cent lower at 4.60 per cent and this downward movement is set to continue. Of course, anyone who has a variable rate mortgage, be it a
tracker or a discount, will benefit when Base Rate falls, so it does look really good for most borrowers in the coming months."
