Hope for homeowners as mortgage payments ease

22/08/2008

Mortgage rates have moderated significantly over the past month, financial website Moneyfacts has claimed.

According to the site's research, the average rate on a two-year, fixed rate deal now stands at 6.59 per cent, down from 7.08 per cent at the beginning of July.

By way of comparison, the average stood at 6.56 per cent last August, just at the onset of the current economic downturn.

However, this data contrasts with a study released by rival site moneysupermarket.com earlier this week, which showed that the average best-buy two year fix has gone from 5.73 per cent at the beginning of the crunch to 6.15 per cent now.

This suggests that, while the cheapest deals continue to suffer in the current economic climate, mortgages as a whole are becoming cheaper.

Commenting on the new surveys, Kevin Still at EuroDebt said: "For home owners that have accumulated sizeable unsecured debts the material factor is the loan to value percentages that are being offered by lenders and the falling house prices, making it very difficult to use re-mortgaging or even property disposal as a method of paying off the credit cards and unsecured loans.

"Across EuroDebt's client base of home owners, the average level of unsecured debt is £35,000 with eight creditors."

Tags; Current UK Economy, Housing Debt and Bills,

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