Lenders offer unprecedented fixed-rate mortgage deals
Saturday 11 October 1997
Woolwich yesterday cut the interest rate it offerers borrowers for fixed mortgages over five years from 6.99 per cent to 6.79 per cent. Nationwide also announced it had cut its five-year fixed rates by half a percentage point to 6.99 per cent.
The cuts follow a dramatic drop in long-term interest rates, enabling mortgage providers to borrow cheaply and pass on the savings to customers.
Earlier in the week, Abbey National launched an offer of 6.49 per cent, fixed for five years, and cut mortgage arrangement fees to pounds 250 from pounds 395. Northern Rock responded a day later by cutting its rates to 6.45 per cent. Until a week ago, very few providers offered rates of less than 7.25 per cent on five-year fixed-rate mortgages.
Industry observers believe the latest cuts create an unprecedented situation for new borrowers where fixed-rate mortgages are substantially cheaper than those with variable rates.
Most variable mortgage rates now hover between 8.25 and 8.45 per cent. But borrowers can now fix their payments at a rate almost two percentage points below this. With the next move in interest rates expected to be up, the gap is likely to grow further in the short term.
Mark Chilton, a mortgage expert at international property consultants Savills, said: "There is now a stunning differential between fixed and variable rates which may be unprecedented. Every man, woman and child in the country should be looking at this."
Mortgage brokers believe the deals on offer may be so cheap that existing borrowers as well as new borrowers may benefit from taking them up. Past experience in other countries, such as the US, indicates that borrowers benefit from switching if fixed rates are more than 1.25 points below variable rates.
The rates may only be on offer for a short time. Mortgage providers set in motion the cheaper deals at the beginning of the week when they could borrow long-term money at a rate of just 6.6 per cent. Long-term interest rates have since risen to more than 6.9 per cent.
- 1 What if 35 Palestinians had died, and 800 Israelis?
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 5 Ross Burden dead: MasterChef and Ready Steady Cook star dies at age 45 after suffering from cancer
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK
Disney heiress Abigail disowns her share of family profits in West Bank company
'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Ross Burden dead: MasterChef and Ready Steady Cook star dies at age 45 after suffering from cancer
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...
£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...
£400 per day + competitive: Orgtel: Liquidity Reporting - Basel III - LCR - Ba...
Negotiable: Harrington Starr: Client Services Associate (Microsoft Office, Ana...