Two Year Fixed Rate Deals Fall Below Bank Of England Base Rate

Wed, 05 Sep 2007

Up to 10 per cent of the most competitive two-year fixed rate deals are now lower than the Bank of England base rate with the return of 4.99 per cent mortgage offers, new figures from mform.co.uk have revealed.

The online mortgage advice firm’s analysis found that currently 24 out of the 200 best deals - ranked on true cost which includes all fees - are priced at 5.75 per cent or lower, with 63 of the best deals priced at 5.99 per cent or lower.

Yorkshire Building Society is offering a 4.99 per cent two-year deal, which includes a two per cent fee based on the sum borrowed, while other banks such as Nationwide and West Bromwich Building Society have reduced fixed rates .

Francis Ghiloni, Marketing and business development director, commented: "Cheaper fixed rates are on the way which will be a relief to many and particularly those whose current fixed deals are coming to an end."

"However lower headline rates do not necessarily mean lower costs for borrowers . Some of the low initial APRs are only made possible by high upfront fees ."

He continued: "Borrowers need to focus on the true cost of their loan. Many lenders are now offering loans where the fees are based on the size of the advance, so borrowers need to be rate smart when comparing mortgages ."
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