Lenders are granting the most affordable mortgages yet, as shown by official figures released last week.
The rock-bottom rates translate to an annual savings of approximately £500 on the usual £145,000 loan, with monthly repayments falling from £772 to £730.
The numbers supplied by the Bank of England (BoE) confirmed that the average loan rate stood at 3.55 percent. The average rate in March 2009 was 4.08 percent, after a 0.5 percent reduction.
The average fixed-rate mortgage was 4.09 percent, while the average rate for “floating” deals, like that of a tracker, reached 2.86 percent.
However, experts caution that these deals are for the wealthy or well-paid who can afford a large deposit. For instance, a typical first-time buyer has to pay a deposit of 20 percent of the property’s value.
In all, only 52,420 persons were approved for loans, the highest number since December 2009 but still lagging behind the 100,000 per month prior to the financial crisis.
John Cridland, Director General of the CBI, urged ministers to “stop the stagnation” and “jump start” the housing market.
David Hollingworth, from London & Country Mortgages, said, “If you have a deposit, you can get an extremely attractive mortgage rate.”
“The mortgage market is as competitive as it has been since the credit crunch struck.”
“But the backdrop is still tighter criteria and a need for bigger deposits, which excludes many, many people, particularly first-time buyers.”
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