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The cost of getting a fixed rate mortgage drops

12/08/2008

Recent Bank of England data shows that the cost of getting a fixed rate mortgage, one of the most popular mortgages on the market fell in July. This is the first time since February so comes as welcoming news to homeowners who have seen mortgage rates increase to record levels in eight years. Though this is good news, experts say that it is still too soon to say that we are seeing a turnaround in the UK mortgage market.

Lena Komileva who is a market economist at Tullet Prebon said, "Rates have fallen but they are still very restrictive given the current macro-economic backdrop."

The fall in getting a fixed rate mortgage will come as a relief to thousands of homeowners said Alan Clarke an economist at BNP Paribas.

"This is the first bit of helpful news for a while but it comes on the back of a sizeable upward shift the prior month, so rates are still higher than two months ago," he said. "If reports are correct that potential buyers are sitting on their hands in anticipation of possible stamp duty freezes, then to some extent it is academic what the cost of a two-year fixed rate is, new buyers are holding fire."


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