Fixed mortgage rates are falling

Although lenders such as Abbey, Mortgage Express, Barclays and Northern Rock had previously been expected to increase the rates on their fixed products, moneyfacts.co.uk, a mortgage industry expert, has stated that mortgage providers are now reducing them instead.

Julia Harris from moneyfacts.co.uk gave the warning that mortgage lenders were rapidly withdrawing their fixed mortgage rate products, with no sign of their 'similar' replacement.

This situation appears to have been linked in with January's surprise base rate increase yet with no subsequent base rate increases since then, moneyfacts has reported that numerous mortgage providers have slashed their fixed rate mortgages since the beginning of March.

Denise Blake, mortgage analyst, stated that some stability has now returned to the mortgage market, following the earlier rush among borrowers to obtain the best fixed-rate deals before they disappeared.

However, she continued that borrowers who opt for a discounted rate instead could reduce the amount of interest they have to pay, with it requiring a 0.5% base rate rise before their rate would be on a par with that of a standard competitive fixed product.

Denise Blake did however welcome the fact that fixed-rates are falling and commented that there were some great deals available currently, but warned that, with another base rate increaser a strong possibility, it is debatable how long this trend will last.