Mortgage rates rise despite six months of 0.5%
Wed, 09 Sep 2009
Financial advice website Moneyfacts has revealed that their figures for the past six months, during which the base rate has been at 0.5%, has shown an Increase in mortgage costs and rates.
According to MoneyFacts mortgage customers have received “very little benefit” from the reductions in Bank of England base rates. These increases in costs while the BoE rate has reduced shows providers are making sure that their balance sheets are healthy before factoring in discounts to their mortgages.
On a positive note, Moneyfacts noted that competition is returning to the mortgage market, with products such as HSBC's recent 1.99 per cent discount loan for 40% deposit holders.
Spokesperson for Moneyfacts, Michelle Slade, said: "The number of mortgages available is slowly increasing and the average arrangement fee charged has decreased. The launch of the sub-two per cent HSBC deal will hopefully spur other lenders on to reduce rates and bring much needed competition back to the market ."