Base Rate holds firm at 0.5% as mortgage rates drop
Despite the 0.5% base rate having an adverse effect on the hopes of savers throughout Britain, new analysis found that those able to secure a mortgage can access significantly better deals now than when the base rate first fell to 0.5%.
With the Bank of England holding the base rate at 0.5% for the 30th consecutive month, a new study by independent financial research company Defaqto reveals that mortgages today are thousands of pounds cheaper than when the rate first fell in March 2009.
According to the Defaqto data, average mortgage rates have fallen considerably over the period comprising March 2009 to September 2011.
Taking, as an example, a 60% Loan-to-Value 5 year fixed mortgage, there is a difference of £4,445 for someone taking out the same type of mortgage today compared to March 2009.
"The current economic climate has made it extremely difficult for people to borrow, particularly first time buyers,” said David Black, Defaqto's Insight Analyst for Banking.
“However, the good news for those that manage to secure a mortgage is that mortgage rates are significantly more favourable now than they were two or so years ago,” he added.
First-time buyers gain confidence
In further news regarding first-time buyers, the latest report from a leading professional advice website revealed recently that ‘first time mortgage advice’ is one of the most searched for financial terms online at the moment, hitting a 16 month high in August. The report looked at search terms which were immediately preceded by the term ‘Find an IFA’.
The figures also stated that ‘personal retirement planning’ ranked top of all the ‘find an IFA' searches in August, driving 38% of enquiries. Additionally, figures show that the demand for ‘investment and savings advice’ also remained high, accounting for 26% of searches.
The more information customers have about banking products and services, the more chance they will have of making wise financial decisions. There are many products to learn about, the leading ones being bank accounts, credit cards and pre-paid cards.