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Mortgage rates to get cheaper

Date: Wed, 17 Nov 04 Analysis

Charcol, the mortgage broker, has claimed that mortgages are to get cheaper over the coming months.

Ray Boulger, leading mortgage broker at Charcol, said that fixed rate loans had fallen by half a per cent and that the interest rate also looked like it had peaked at its current level.

Mr Boulger commented: "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 [Bank of England] base rate likely to follow.

He pointed out that mortgages could well be getting cheaper, as house prices are beginning to fall.

"In July 2004, the best two-year fixed rate was 5.19 per cent. The best deal is now half a per cent lower at 4.69 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," he added.

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