UK mortgage rates are unlikely to be slashed.
A significant cut to UK mortgage rates is unlikely despite the newly announced BoE lending plan - is the view of some market experts who are predicting that the most likely effect is a halt to further rate hikes
Home-owners who are hoping that UK mortgage rates will be cut may well be left disappointed.
The BoE governor Sir Mervyn King recently announced plans to offer around £100 billion in funding to banks providing it is passed on in the form of cheaper mortgages and loans.
However some believe despite this positive news a return to record low rates is unlikely to happen.
Rates started to rise at the end of the second quarter and have continued to rise higher in more recent weeks. It is believed that the BoE funding plan may halt further rate increases but it may not reduce rates for borrowers.
Banks increased their rates to cover increased funding costs. It is thought that not all of the increased costs have yet been passed on and therefore while UK mortgage rates may not rise much further over the coming months, they will not be cut much lower either.
The outlook still remains uncertain in both the UK and eurozone, therefore it is unlikely UK borrowers will see the lending tap turned on to full.
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