Borrowers set to benefit as mortgage lenders drop rates
There has been good news for Bailiwick borrowers as a number of high-street mortgage lenders have dropped their interest rates, and local financial advisers believe they should continue to fall.
‘NatWest, Barclays, Lloyds and HSBC have all dropped fixed rates by half a percent to around the 5.5% level,’ said Oracle Finance director Conor Burke.
‘It’s all going in the right direction and I would expect to see mortgage rates fall further. A big driver in this is competition between the lenders who are all looking for business.’
He added that although rates had fallen, Channel Islands mortgage rates still remained higher than those in the UK.
‘We are still around 0.75 to 1% higher,’ he said. ‘All the indicators, such as the Bank of England base rate and inflation are moving in the right direction, so hopefully we will see further reductions in fixed rates.
‘Base rate trackers are very popular at the moment as people capitalise on the downward trend.’
Pierre Blampied, managing director of mortgage broker SPF Private Clients, said he was advising customers to go for tracker rates. He was hoping lenders would do more to make fixed rates attractive.
‘We have seen a minor reduction in fixed rates locally but it is nothing like we have seen in the UK,’ he said.
‘The differential between fixed rates here and those in the UK is probably the greatest it has been in some time. So in our view there is little value in fixed rates now.
‘In our view the base rate will fall in the second half of this year and then again next year,’ he said.
‘The mortgage rates for first-time buyers are probably at their highest point today compared to where they will be in the next two years.’