Interest rates 'set to remain low'

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Interest rates 'set to remain low'

Thu 6th Oct 2011

Mortgage lenders are increasingly likely to offer low fixed-rate mortgages due to their confidence that an interest payment rise is unlikely in the near future.

This is the view of Ben Wilkie, editor at What Mortgage, who suggested that banks are almost positive that any increases that do occur will be limited during the next two years.

His comments were made after comparison website MoneySupermarket revealed that the average two-year fixed-rate mortgage currently stands at a record low of 3.82 per cent.

The figures, which are down from 4.01 per cent in August, emerged after Leeds Building Society announced the launch of its lowest ever two-year deal at 1.99 per cent.

Mr Wilkie argued that the limited change in the cost of five-year fixed-rate mortgages highlights that banks are unsure of the long-term future of the UK's economy.

"There is a confidence issue that rates are going to stay low for a reasonable amount of time … [because] it is a bit easier to predict what is going to happen over two years," he explained.

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