Thanks to record low mortgage interest rates, cheap mortgages in the UK are expected to lend a helping hand to millions of homeowners for another five years, according to experts.
Optimism over home loans emerged on 15 February 2011, following the latest economic forecast from the Bank of England, though the low rates will negatively affect savers.
Sir Mervyn King, Governor of the Bank of England, said he has “deep sympathy” for the savers who are receiving “negligible” yields through no fault of their own.
He hinted that the benchmark rate will remain at its historic 0.5 percent low until 2014, and some experts believe it may last up to three years after that.
In addition, the low interest rate has allowed lenders to offer some of the cheapest ever mortgage deals to borrowers, even though the lending criteria is expected to become stricter this year, amid a weak economic outlook.
“We are sticking to our view that interest rates will not rise until at least 2013 and could very well stay at 0.5 percent until 2014,” said Howard Archer of IHS Global Insight.
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