BoE: Mortgage holders paying £200 a month less

The Bank of England said that at least 25 percent of UK homeowners are paying £200 less a month compared with the same period last year because of falling interest rates and lower mortgage payments.

The BoE made the assessment after conducting a survey on 2,000 households who said that at least half of them have noticed falling monthly payments of over £100 over the last year, with almost a quarter benefiting by more than £200.

The result of the survey, published by the BoE in its Quarterly Bulletin, showed that on average, British homeowners are paying at least £130 less because of dropping interest rates.

The Bank said that the government’s stimulus programme, designed to mitigate the effects of recession, unemployment and the fall in house prices, have benefited many householders, helping them survive the economic crunch.

The Bank released the survey report as it announced last week that it is maintaining the Base rate at 0.5% and is continuing with its £200 billion asset purchase programme.

The Committee expects the announced programme to take another two months to complete. The scale of the programme will be kept under review.

Drew Wotherspoon, of John Charcol, the UK’s leading independent mortgage adviser commented, “The raft of fixed rate reductions being made across the mortgage market this week are undoubtedly going to be a welcome Christmas present for anyone who has been holding out for a fixed rate deal.  It should provide some welcome Christmas cheer for those first time buyers who need the security of a fixed rate, as well as for those borrowers who have been sitting on their lender’s standard variable rate, waiting for the right deal to lock into.  Despite these cuts however, tracker mortgages are still looking more attractive overall.”

For anyone looking for a high value mortgage loan, particularly one into seven figures, John Charcol is currently offering a purchase only 2 year Fixed Rate Shared Exclusive with RBS at 3.19%, for a maximum 60% LTV up to £2million with a £2,499 fee.

For anyone looking for a smaller, but longer term deal, Newcastle Building Society has a 3 year fixed at 4.40% to 80% LTV with £1,094 Fee and a 5 Year Fixed 4.89% to 80% LTV with £588 fee.