Average mortgage rates to hit 2%

Average mortgage rates will fall by 0.04% over the next month to 2%, the latest TotallyMoney.com Mortgage Rate Index has predicted.

The index which aggregates the views of a panel of the UK’s foremost mortgage experts has also released its predictions for the medium to long term.

The Index predicts that average mortgage rates will increase by 0.28% over the next two years and will be 1.5% higher in five years time.

Will Becker, chief executive of TotallyMoney.com, said: “After last month’s success of our panel predicting the exact fall in the Mortgage Rate Index, this month the panel’s view is again for a modest decline in the MRI of just 0.04%.

“As the competition on pricing has got fiercer we are starting to see lenders relax their criteria making these juicy deals more attainable.

Peter Lawrence at Lawrence Rand added: “These rates are at historic lows but still the majority of money is available for those with big deposits (30-50%).

We really need to see these changes filtering through at the higher loan to value range where low rates and relaxed criteria would provide a real boost to first time buyers who are still struggling to get on the ladder.”