Rate begins to filter through

24-Jan-2008

There was evidence this week that the interest rate cut last month is beginning to filter through to the high street.

Two mortgage lenders have announced cuts in their fixed rate deals, following the Bank of England's decision to reduce the base rate by 0.25 per cent.

Abbey has announced that its three-year fixed rate mortgages are now 0.1 per cent lower, meaning they now start at 5.62 per cent.

Meanwhile, Alliance & Leicester now offers three and five-year rates of 5.79 per cent and a two-year fixed rate of 4.99 per cent.

This news will be welcomed by people looking to buy their first property this year, especially as further interest rate cuts are expected.

The credit crunch is likely to make for a more hostile lending environment in 2008, which will be bad for first-time buyers.

But if rate cuts are passed on and the housing market slows, some could finally get a chance to clamber on to the first rung of the property ladder.

No rate cut dividend for fixed mortgages LTV ratios to hit first-time buyers


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