Low mortgage interest rates could be here to stay, say experts

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Though some people are hesitating about buying homes because of political uncertainty, the Council of Mortgage Lenders (CML) has said that mortgage lenders are resilient and are offering low-interest rate mortgages to attract borrowers and buy-to-let investors, according to an August 2016 PropertyWire.com article.

The Bank of England interest base rate was recently cut to 0.25%. This influences the mortgage rate interest, but the CML points out that funding costs, competition and other market conditions affect the rates more significantly. It says that average mortgage rates are low, having fallen from 3.8% to 2.9% during the last six years.

The Executive Director of the Intermediary Mortgage Lenders, Peter Williams believes that low-interest mortgages are much more than a passing trend. He said:

“Lower for longer is good news for consumers, who will reap the benefits of strong mortgage affordability. Borrowers on tracker deals will see a reduction in their monthly payments, and remortgagers will be well placed to tap into attractive deals.

The CML announced that fixed rate mortgages account for around 90% of new mortgages, and these will not change following the cut in bank rate.

David Whittaker, the managing director of Mortgages for Business. says that buy-to-let property transactions will continue to be a good investment. Savings, bonds and equities are often less attractive to buyers because yields are low, but there is still a high demand for rental property. With the right finance and business plan, Whittaker says that buy-to-let property is a solid investment.

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