Lenders best fixed mortgage rates could fall.
The best fixed mortgage rates on offer could fall if swap rates continue to drop at the levels seen over the past month.
The biggest influence on the pricing of fixed mortgage rates is swap rates, which is the mechanism by which mortgage providers acquire funding at a fixed price for over a set term - usually anywhere from 1 to 10 years
Two year swap rates fell 0.15% from 1.35% to 1.20% during May. At the same time five and ten year swaps fell by 0.18% from 1.6% to 1.42% and by 0.19% from 2.33% to 2.14% respectively.
It is hoped that if swaps continue with their sharp fall the best fixed mortgage rates on offer could also soon fall.
A drop in swap rates on the scale seen in May could offer scope for lenders to cut some rates. However if the Eurozone crisis deepens and the money markets freeze this would result in a further reduction in lending capacity.
The best fixed mortgage for a 2 year term is currently offered by HSBC who offer a rate of 2.64% for those with a 40% deposit. The Post Office offer a 3 year fixed rate at 3.39% for buyers with a 25% deposit and for a 5 year fix the Nationwide offer a rate of 3.39% for those with a 30% deposit.
If you are looking for the best fixed mortgage rate currently on offer tailored to your circumstances, contact Deal Direct independent 'whole of market' broker.
Contact Deal Direct for a fixed rate mortgage quote.
