Mortgage experts have predicted that mortgage deals are set to get cheaper over the next few weeks as worries about an imminent interest rate rise have been quashed.  The Independent reports that the minutes of the latest Bank of England Monetary Policy Committee meeting has reduced the likelihood of a Base rate rise, with some lenders already cutting their fixed rate mortgage deals.

Fixed rate mortgage deals could go as low as 4 per cent

Brian Murphy, director of the Mortgage Advice Bureau, said: “What is happening is that the money markets priced a more immediate Bank rate rise into the cost of mortgages. Now it seems that this may not take place until August or even next year. This is starting to feed through to rates.”

Ray Boulger from broker Charcol agrees: “Fixed rates could go even lower. The market is still anticipating rates going up more quickly than they actually will. The fact that inflation went down rather than up last month was a bit of a game changer.”

Whilst The Independent highlights a five year fixed rate at 4.19 per cent through the Yorkshire Building Society, Mr Boulger believes that fixed rates could go as low as 4 per cent.

Discounted rates also improve as gap between standard and high loan to value deals narrows

The newspaper reports that some discounted and tracker mortgages are also being more competitively priced.  David Hollingworth from London & Country mortgages said: “Mortgages that track the base rate for the lifetime of the mortgage are interesting at the moment. ING Direct and HSBC are offering lifetime tracker rates at just 1.85 per cent above the base rate and 1.89 per cent respectively, and that’s with no fee.”

Some lenders are now also offering better deals to applicants with smaller deposits.  Mr Hollingworth added: “Some lenders have cut their rates on higher loan-to-value mortgages – 80 or 85 per cent – more aggressively. This means the price differential between higher and lower loan-to-values has narrowed a touch.”