Interest rates continue to fall

Nia Williams

January 13, 2010

The results are based on the activities of nearly 800 Countrywide Mortgage Consultants throughout the UK, which also reveal that tracker products are closing the gap on the total volume of mortgage applications.

While the overall volume of sales still swing slightly in the favour of fixed products, the percentage split between fixed and tracker products has changed dramatically over the last year. Tracker mortgages have grown from representing 3% of mortgage applications in May 09 to 47% in December 09 – with a jump of 10% in the last month alone.

Overall, interest rates for the Top 10 mortgage products have fallen for five consecutive months, pushing down the average interest rate in quarter four 09 to 4.73% – a reduction of 0.74% compared to the previous quarter.

Mortgage applications jumped by 27% in quarter four, compared to the same period the previous year, while statistics also issued by Countrywide’s estate agency division reveal a 48% increase in new applicants during the same period.

Mortgage providers also appear to be more competitive with higher loan to value (LTV) mortgage products resulting in two 90% LTV mortgages leading the Top 10 Mortgages Applied for in December 09.

Grenville Turner, Countrywide’s group chief executive, said: “2009 was undoubtedly a difficult year for the mortgage market but by the second half of the year, we saw a return of confidence from both consumers and lenders, with increased applications and the re-introduction of competitively priced tracker products.

“This confidence has caused a dramatic shift in the type of business written, with a near equal split between the percentage of fixed and tracker products applied for.

“While lenders are becoming more competitive with their products, it’s important to note that many first time buyers are still struggling to raise the necessary deposits to achieve the best rates, which will continue to impact the market.”

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