Official figures from the Bank of England have revealed that homeowners and buyers are currently receiving their best ever deals on mortgages, after rates fell during the first quarter of this year, compared to the rates at the end of 2014.
The new average rate of 3.01 per cent is now the lowest since 2007, having fallen from 3.26 per cent.
This has been caused by a housing market battle between lenders to offer the best mortgage deals in the last few months, with a first rate rise from the Bank of England not looking likely for some time yet.
However, there does not appear to have been a sudden surge in borrowing, or any signs of riskier lending practices. This is pleasing news for the Bank of England, as it indicates that the economy is being stimulated without households getting into uncontrollable debt as they take on more than they can handle.
“Consumers are the clear winners of the mortgage price war,” said Brian Murphy, of Mortgage Advice Bureau. “Average interest rates on all new loans have fallen to their lowest point since the Bank of England began recording this data.”
In April, 68,000 mortgages were approved for house purchases, worth a total of £11.1bn. This was the sharpest monthly rise since early 2009, after rising from the 61,900 approved in March.
