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Borrowers can now benefit from the lowest mortgage rates in years, according to calculations from two well-known financial sites.
Research from Moneysupermarket.com suggests that increased competition between lenders has driven down the costs of both fixed-rate and tracker mortgages. This has left rates at their lowest level since the Bank of England cut its base rate to 0.5% in 2009.
Divisions at the heart of the UK’s interest rate policy are becoming starker – posing a dilemma for mortgage borrowers.
The split has occurred between members of the Monetary Policy Committee (MPC), which sets the Bank of England’s influential base rate, known as “Bank rate”. On one side are those who say that a rise in rates is needed to tackle high inflation, currently running at 4.5%. They argue that the Bank’s “wait and see” approach risks undermining its credibility – with the result that the public will begin to anticipate higher prices. Higher wage demands could push up prices further, leading to an inflationary spiral.
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