Outlook Some welcome news for monetary policymakers: it seems a price war is breaking out among lenders. Moneyfacts is reporting that the cost of fixed-rate mortgages is coming down sharply.
The move has been sparked by skittish lenders, who currently have an unusually large number of customers on standard, variable-rate mortgages, largely because those rates are still very low.
They’d like to keep hold of as many of their clients as possible, and so they’re competing hard. These products should come into their own when interest rates start rising and borrowers seek to protect themselves from further increases.
The fact that fixes are now unusually competitive is actually welcome. Weighed down by high levels of mortgage debt and with wages flat or falling, homeowners are unusually sensitive to changes in base rates. The availability of good-value fixes may serve to cushion the blow when the Bank of England finally starts raising them.