MORTGAGE RATES WILL FALL AGAIN, SAY EXPERTS

MORTGAGE rates are set to fall further as lenders battle for business.

Although rates are already at record lows, there are signs they will edge even further downwards, the Bank of England predicted yesterday.

The average rate on a twoyear fixed mortgage has already fallen below three per cent as a price war reignites before the property market’s busy summer period.

For those with larger deposits, average two- year fixed rates are now under two per cent – down last month from 1.93 per cent to 1.92 per cent.

Banks and building societies also plan to lend more to people with deposits below 10 per cent.

The Bank of England’s Monetary Policy Committee is expected to keep the base rate at its current record low of 0.5 per cent.

Alex Gosling, of online estate agents HouseSimple, said: “It is hard to believe that mortgage rates could drop any further … but money is cheap.

“Lenders are most definitely open for business.”

Lenders expect demand for home loans to increase in the coming three months, the Bank’s latest Credit Conditions Survey found.

Profit margins on mortgages are expected to slip in the same period as they compete for customers.

Mark Dyason, director at Edinburgh Mortgage Advice, said: “Lenders all want a bigger slice of the market and the best way to achieve this is through better deals and lower rates.

“As we move into summer, buyers will be sitting pretty.”

The anticipated boost will follow the survey’s findings that demand for mortgages fell in the first three months of the year.

Some lenders put the fall down to concerns about housing affordability and uncertainty surrounding the homes market.