Mortgage Rates
Mortgage rates in the UK have fallen in dramatic style over the last 15 years. In October 1989, interest rates were at a mind-blowing 15%, with mortgage rates typically between 16% - 18% at the time. Today, the UK government's economic policies, as well as the Bank of England's influence have brought interests rate down to 4.75% at the end of 2004. An extensive choice of mortgage lenders in the UK market has also meant that mortgage rates have become suppressed in line with the interest rates. Currently mortgage rates of between 4.79% and 5.5% on both variable mortgage rates mortgage products and fixed mortgage rates mortgage products are widely available from mortgage lenders.
Mortgage Rates in 2005
But what will the mortgage market bring for mortgage holders in 2005? Although the interest rate & mortgage rates remained quite low in 2004, last year saw a slow but steady rise in the base interest rate, swiftly followed by small rates rises from mortgage lenders. Consumer barometers at many of the major mortgage lending banks reveal that at the start of 2005, between 50% to 70% of mortgage holders expect rates to continue to rise. This fact is not surprising, given that mortgage holders experienced no less than six rates rises in 2004.
Mortgage rates analysts though take much the opposite view for 2005. Many mortgage and interest rates analysts now believe that the interest & mortgage rates have 'peaked' in their current upward trend, and that the rates will now plateau during 2005 as the Bank of England are on target for achieving their target rates of inflation. Halifax, the UK's biggest mortgage lender, has gone one step further. They are predicting rates to actually fall twice during the year, which may bring rates down to below the rates level seen at the start of 2005.
And the signs continue to be positive for mortgage holders concerned about the rates. New mortgage uptake may have slowed to record levels, but the UK housing market saw a small surprise price rise of 1.1% in December 2004. Additionally, the Bank of England has continued to freeze interest rates at 4.75%, hinting further that the rates are in good shape despite the continued rise in personal debt. The news only gets better for rates watchers with competition between mortgage lenders and mortgage products set to intensify even further in 2005. Some of the best rates deals on mortgages are currently from fixed rates mortgage products. One mortgage lender is currently offering a fixed rates mortgage product at fixed rates of 4.79% for three years! All good indications that 2005 could be stress-free for mortgage holders concerned about the rates.