Tracker Mortgage Rates Hit New Low

• News
• Published: 09 Feb 2010 in Money and Mortgages

The mortgage market became more competitive during January as tracker mortgages fell to a record low level, according to the Bank of England's figures.

Tracker deals average interest rate fell from 3.92% to 3.63% during the first month of 2010, which is the lowest they have been recorded at since the Bank began monitoring the levels in 1997.

The cost of fixed-rate mortgages also improved. Two-year loans fell to a level last seen in July 2003, at an average of 3.97%, while a five-year loan dropped by 0.12% to 5.55%.

More than 300 new mortgage products launched in January and a number of lenders cut rates on existing deals as competition returned to the market. However, the number of deals available to those with small deposits also improved, with a jump of 26% in mortgage availability for people borrowing up to 90% of their homes value during the month.

Commentators said the move showed lenders were feeling increasingly optimistic about the housing market, following 12 months of rising house prices, while they were also more confident about pricing in risk.