Mortgage rates have fallen to their lowest level, with a record low observed in February, according to the Mortgage Advice Bureau’s National Mortgage Index.
The report looked at average rates for two and three-year fixed mortgage deals, with two-year fixed rates falling by 0.02 per cent since January, and three-year fixed rates decreasing by 0.09 per cent over the same time period.
Over the past year there has been a major fall in rates and the downward trend shows little sign of stopping, according to the MAB.
Customers are benefiting the most from the low rates and are also enjoying the widest choice of products since 2008.
According to Brian Murphy, head of lending at the MAB, a significant amount of customers will be able to benefit from the low rates.
“It is not only good news for prospective homebuyers: existing homeowners can look to take advantage of these low rates by remortgaging to a much better deal, particularly if they are on a poor value standard variable rate,” he explained.
“Given the current outlook, low mortgage rates look set to stay on the menu for some time. There is an appetite among lenders for business, and consumers are in a good position to reap the benefits of increased competition.”
There is also an increasing trend to turn to brokers to secure the best deals, with competition between lenders heating up.
In February, the MAB reports that more than 70 per cent of mortgages were sourced by using a broker, and this figure may continue to rise in line with low rates.
Mr Murphy acknowledged that it can sometimes be difficult for prospective borrowers to navigate an “increasingly complex” and diverse mortgage market, with post-Mortgage Market Review applications being time-consuming in some cases.
“Many will find intermediaries are better positioned to meet their needs, as they can provide unbiased recommendations and have access to a huge number of products,” he added.
Avant Homes has also published this guide to help first-time buyers and existing homeowners choose the right mortgage for their requirements and secure their new home.
The MAB data is supplemented by recent data from the Council of Mortgage Lenders, which estimates that gross mortgage lending totalled £17.6 billion in February; £4 billion higher than February 2015 and the highest lending total for a February since 2008, as banks and building societies display increasing confidence in borrowers.