It seems that over the past year or so cheap mortgages have become a thing of the past in the UK, with the series of five interest rate hikes between August 2006 and July 2007 resulting in lenders hiking up their mortgage interest rates and reducing affordability for many potential property purchasers.

The interest rate cut in December spelled good news for homeowners and those looking to purchase property, as it meant that affordability was increased, albeit only slightly, although not all lenders followed suit in reducing the interest rates.

The availability of cheap mortgages and remortgages has dwindled of late due to the increased interest rates in the UK as well as the effects of the credit crunch, which has made lenders all the more cautious and forced many to put up rates. However, although the credit crunch is still wreaking havoc in the financial markets many industry experts have predicted that the base rate will be cut a couple of times before the summer, despite the fact that there was no base rate cut for January.

With this prediction in mind it seems that a number of lenders are now introducing more affordable mortgage deals, and those looking for fixed rate mortgages could even find interest rates on the south side of 5%. A number of lenders have revealed the launch of fixed rate mortgages, with rates of under or around 5%, and this could make things easier for new buyers who are already facing tough times as a result of high house prices and tight credit conditions.

According to a recent report Yorkshire Building Society, Leeds Building Society, Newcastle Building Society, First Direct and Giraffe Money are amongst those that have announced the launch of fixed rate mortgages that hover around the 5% mark. If house prices also fall over the course of this year, as predicted, and interest rates continue to fall, also as predicted, the outlook for new and first time buyers could be far brighter.

One industry official stated: “The good news for borrowers is that two-year swap rates have finally fallen under the 5% mark in anticipation of another rate cut, so fixed rates are now becoming much more competitive.”

‘Even so, trackers will prove best value for most as Bank rate is widely expected to fall to 5% or lower this year. Discounts could also prove as good value if lenders respond to Alastair Darling’s call to pass on the full discount of any Bank rate cut.’

Those looking to take out a cheap fixed rate mortgage, or indeed any other type of mortgage, are advised by industry officials to compare mortgages from a wide range of lenders in order to get the best deal, as lenders are chopping and changing their rates on a regular basis in the current financial climate. Browsing and comparing mortgages is easy, fast, and convenient these days, as it can be done from the comfort of your home and at any time of the day or night using the Internet.

However, consumers are also urged to remember that whilst cheaper rates are making a comeback with some lenders accessibility to mortgages and other forms of finance may prove more difficult because of the tighter credit conditions.

Related Articles:

• The Benefits of a UK Mortgage Broker
• End Of The Road For 125% Mortgages
• Repayment and Interest Only Mortgages

If you like this post why don't you subscribe to our feed?

Related Articles

• IVA homeowners face soaring interest rates
Homeowners that have entered into an IVA, or Individual Voluntary Arrangement, could face soaring interest charges on their mortgage as the result of a clause in the agreement that requires
• No change in interest rates for March
Following the latest Monetary Policy Committee meeting last week the Bank of England has decided to keep interest rates on hold amidst concerns over rising inflation. Although there have been
• Sale and rent back scheme still being branded a rip off
A fresh attack has recently been launched against some sale and rent back scheme firms by the homeless charity Shelter, with officials claiming that many of these forms fail to
• Many first time buyers facing soaring mortgage rates
According to recent figures from the Bank of England, many first time buyers are now facing crippling mortgage rates, with many being hit by the highest mortgage rates in over
• Darling addresses long term fixed rate mortgages in budget
As promised one of the issues that Chancellor of the Exchequer, Alistair Darling, addressed in his first budget recently was the importance of longer term fixed rate mortgages, which he