Now may be the perfect time to look at mortgage packages as lenders are handing out some of the cheapest mortgage deals since records began, according to official figures.
The Bank of England released figures showing that the average loan to rate is now 3.55%. In March 2009, just before the base rate was slashed to 0.5%, the average rate was 4.08 %.
This drastic fall has led to some of the cheapest mortgage deals since records began. Homeowners are now saving around £500 a year on a typical £145,000 loan, compared to one they would have paid two years ago.
The average fixed rate mortgage has also fallen to new lows and many homeowners could take advantage of the average 4.9% deal. Tracker rates are now as little as 2.86%, which is also a record low.
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However, these cheap deals are only likely to be available to those who can afford it.
Many banks, still wary of the recession, are holding back on lending large deposits for mortgages. The typical first time buyer will now have to find a 20% deposit for the value of the property, which is a figure that has pushed many out of the market for the time being.
This is illustrated by the Bank of England in a separate report as the number of buyers obtaining a mortgage has fallen.
In August this year, only 52,410 people were approved for a loan by their bank or building society.
There is a sign that things are getting better as the Building Societies Association found that there has been a 16% increase in mortgage approvals during the first 8 months of 2011.
“Lending by mutuals has held up well over the summer months, and in August gross lending reached an 11 month high. Approval figures continue to look promising as consumers take advantage of the competitive mortgage rates currently offered by mutual,î commented Adrian Coles, Director-General of the Building Societies Association.
ìHowever, the outlook for the economy has deteriorated over the past month, as has consumer confidence, which could well spill into the housing market, causing further weakness,î continued Mr. Coles.