The cost of most popular mortgage deals is predicted to continue to decline to even lower than 1 percent. The current cheapest mortgage is at 1.14 percent from Yorkshire Building Society, for its new two-year loan.
Following the release of the company's annual results and the introduction of its new mortgage deal, Chris Pilling of Yorkshire Building Society, said that a two-year fixed home loan could further decline and hit new all-time lows by end of this year, The Telegraph reported. This is because of the growing competition among lenders and low interest rates.
Leading mortgage analyst David Hollingworth, of broker London & Country, also shared the same outlook, saying, "For the first time in many months we can see again that there's scope for further falls."
The price war will make it cheaper for borrowers to purchase a home. Express.co.uk said an annual mortgage bill in the U.K. could see a cut of £130 from a typical £150,000 loan.
"If we go as low as one per cent again, you can't say no to anything... and competition (between mortgage lenders) has been significantly stronger in recent months," said Pilling.
The next cheapest two-year mortgage deal is from First Direct at 1.15 percent. HSBC currently offers the lowest five-year fixed loan at 1.99 percent. Meanwhile, First Direct's 10-year deal is the cheapest at 2.89 percent.
After hitting a 10-year high in 2008, the mortgage market has seen a trend of steady declines in the past year. The decision of Bank of England to cancel its plans to increase interest rates fuel another wave of price wars.
Borrowers who want to avail of the five-year fixed loan may want to wait a bit more for the rates to become better. Meanwhile, experts also remind borrowers that even the lowest rates could come with high fees or large deposits.
