Lenders changing mortgage rates

23 May 2005
A new survey has found that lenders are increasingly cutting their mortgage rates as the industry expects potential rate falls.

Signs are increasingly pointing towards a drop in interest rates from the Bank of England's Monetary Policy Committee sometime during the summer, and as such more mortgage lenders are reducing their own rates in anticipation.

Figures from Moneyfacts show that a number of lenders have decided to cut their rates on the back of the recent fall in Swap rates - the rates at which City institutions lend money between themselves.

Halifax, the country's largest mortgage lender, is leading the trend, having cut its fixed rate mortgages for the second time in as many weeks.

Moneyfacts claims that the changes mean that consumers will now see very little difference in fixed rate loans and variable ones, as the difference is now almost non-existent.

"Currently, market sentiment is leaning towards an anticipated reduction in the Bank of England rate with some economists suggesting a possible reduction as large as 0.50 per cent," remarked the head of mortgages at Moneyfacts, Darren Cook.

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