Mortgage rates have plunged to new record lows, the Bank of England has reported, while the price war between lenders shows no sign of a let-up.
Peter Brodnicki, of the Mortgage Advice Bureau, said that today’s deals “will never be repeated”.
Between January 2014 and January this year, for example, 95% loan to value two-year fixes have fall from an average of 5.05% to 4.79%, while 95% LTV five-year fixes have dropped from 5.44% to 5.07%.
Particularly striking is a 75% LTV two-year variable rate mortgage which has dropped from an average of 2.76% to just 1.64% – a fall of over 40%.
Rates kept falling as the year went on. Between December and January, rates continued to drop, with an average 95% LTV five-year fix falling in just one month from 5.43% to 5.07%.
Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “Looking at the Bank’s latest quoted interest rates, there is no sign of any slowdown whatsoever in the mortgage price war.
“Lenders have begun the year with a strong appetite for growth, and newcomers are going head-to-head with established names to launch attractive new deals.
“Rising competition is pushing pricing to new lows, and it means consumers can choose from record-breaking fixed rate deals regardless of whether they have a 5%, 10% or 25% deposit.
“The next six months are shaping up to be the best-ever window to secure a low interest rate if you are looking to buy or remortgage.
“Today’s prices have never been bettered in modern times, and given that a base rate rise is inevitable at some point, it is unlikely they will be surpassed in the years ahead.”