Mortgage interest rates will continue to fall as a price war between lenders continues this year, predicts a mortgage broker.
Shaun Evans, CEO of Mortgage Experience, commented: “Competition is continuing to heat up between banks over mortgages, combine this with a strong chance of a further interest rate cut by the Bank of England and I can only see mortgage deals getting better for property buyers.”
The price war between banks has already seen lenders like Tesco Bank and Sainsbury’s Bank quit the market and Santander reporting lower profits. But while the competition has seen victims amongst lenders, Shaun advises that for borrowers, this is the year of opportunity.
He said: “We’ve got falling rates right across the board, both on buy-to-let mortgages and residential mortgages, it’s a great opportunity for both property investors, first-time buyers and existing mortgage holders, to get great deals.
“To put things in context, interest rates have almost halved based on 10 years ago, which means the average buyer is saving hundreds of pounds every month on their mortgage.
“For example, a mortgage of £250,000 on a property, over 20 years, would have cost £1,300 a month 10 years ago, now you’d be paying around £1,050. It’s a big saving.”
Other trends in the market according to Shaun are better deals on longer mortgage terms. He said: “2019 saw competition between banks over offering the best rates for the most popular two-year fixed deals, but over the last year this has moved to aggressive price cuts on longer fixed rate products and more products being offered.
“In fact, there are more than twice the amount of fixed rate deals there were five years ago. The cost to fix for longer has become much lower.”
