Fixed-rate mortgage cost hits eight-year high in June

04 August 2008

The price of fixed-rate mortgage products reached an eight-year high in June before they dropped back down again in July, new figures have shown.

Bank of England figures have shown that in June the average interest rate for a borrower sporting a 25% deposit was 6.6%, up 0.34% from 6.26% in May.

The last time rates were seen this high for this very popular type of mortgage product was in February 2000.

However, over the course of the last month many lenders have made several rate cuts which has brought down the cost.

Aaron Strutt of mortgage brokers Chase de Vere said: “Lenders are starting to bring their rates down.

“Since the Nationwide cut its rates others have been bringing their rates down too,” he added.

As a result of the rate cuts, Mr Strutt estimated that the average interest rate on a two-year fixed-rate mortgage product is 6.5% across all of the lenders.
 

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