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2015: the year mortgage rates plummeted

2015 will be remembered as the year time mortgage price war reached "boiling point", as lenders battled for borrowers.

The result was that rates plummeted until they reached new all-time lows, according to new research from Moneyfacts.co.uk.

It said a new borrower with the average two-year fixed rate mortgage would be £805 a year better off than a year ago.


Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “When looking back at 2015 it’s difficult think of anything other than plummeting mortgage rates, which resulted in record lows across the whole of the mortgage market.

“For example, in just one year the average two-year fixed rate mortgage fell by a whopping 0.65%.”

Nelson said that with five-year fixed rates also falling, many will be considering fixing to a longer-term deal to protect them from rate rises in the near future.

“First-time buyers have had a good year with the number of products at 95% LTV increasing from 179 in 2014 to 249 today.

"Rates have also fallen in this key area, with the average two-year fixed rate at 95% LTV dropping from 5.22% to 4.29% over the same period.

"This is all down to the influence of the Help to Buy mortgage guarantee scheme, which has made it socially acceptable to lend at this high LTV again."

Nelson said uncertainty over rising base rates was unlikely to end soon.

“The mortgage market is waiting on tenterhooks to see when the Bank of England will raise the rate, and with rumours rife about an increase in 2016, next year will prove to be a tense time in the mortgage market.

“There may be many uncertainties about the future, but one thing we do know is that these record low rates won’t last forever, so anyone looking for a fixed rate mortgage now should act fast to secure the best deal.”


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