With the Bank of England having announced that the base rate of interest will remain at the record low of 0.5 per cent for a 30th consecutive month, Defaqto has pointed out that there is one large section of the UK population that will be happy with the decision.
It noted that mortgage customers have saved thousands of pounds as a result of the Monetary Policy Committee’s refusal to increase rates.
While inflation might be driving the cost of food and other goods up, homeowners who have secured a mortgage have been able to do so at significantly better rates than when the Bank first cut the base rate to 0.5 per cent in March 2009.
Insight analyst for banking David Black said: “The current economic climate has made it extremely difficult for people to borrow, particularly first-time buyers.
“However, the good news for those that manage to secure a mortgage is that mortgage rates are significantly more favourable now than they were two or so years ago – and, in monetary terms, people borrowing now will pay far less over the initial term of the mortgage than those that took out a similar product in March 2009.”
He noted that a five-year fixed rate mortgage can now be found for as little as 3.29 per cent, with some providers offering ten years of set payments at 3.99 per cent.
Meanwhile, unbiased.co.uk recently reported that demand for advice on buying new homes has reached an annual high.