Mortgage price war beginning to cool
As lenders compete to keep their prices at the top of best buy tables and comparison sites, rates have been rapidly falling in recent months with The Chelsea currently topping the table with its 1.69% 2-year fixed rate product.
Iain Strother, head of mortgages at TotallyMoney.com, said: “We’ve seen a fall in mortgage rates in recent months as the government’s Funding for Lending Scheme has given banks and building societies an incentive to lend.
“This has meant rates have dropped as lenders compete to top the best buy tables and capture market share.
“This competition to keep their rates at the top of the best buy tables could mean someone bites the bullet and goes to 1.5%.”
But Strother warned that despite the drop in rates any savings buyers make will continue to be offset by high fees.
He said: “If you are taking out a large mortgage then the fees become less important, but for any mortgage below about £250,000 make sure you check your fees as it may be cheaper to get a higher rate.”
TotallyMoney.com’s latest mortgage rate predictions are available at TotallyMoney.com.