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Record Low Fixed Rates Set To Continue
People seeking a property investment have been told that lenders will continue to offer historically low fixed rate mortgages for some time to come, because they are confident interest rates are set to remain low.
Ben Wilkie, editor at What Mortgage, said banks borrow off the London interbank offered rate, or Libor, which is currently very low.
"You are seeing very cheap two-year fixed-rates because banks assume that even if interest rates do rise, they are not going to rise by that much over the next two years," he explained.
Mr Wilkie went on to say that five-year fixed rates are still slightly more expensive, as it is more difficult to predict what the base rate will be in 2016.
The comments come shortly after MoneySupermarket reported that the Leeds Building Society's launch of its lowest ever two-year fixed rate mortgage of 1.99 per cent means the average two-year fixed rate is now at a record low.
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Article date: 10/13/2011 12:00:00 AM