The government’s Funding for Lending Scheme was introduced last year and will run from 1 August 2012 until 31 January 2014.
Under the scheme banks and building societies are allowed to borrow money from the Bank of England. Banks have strong incentives to boost lending, by lowering interest rates and increasing the availability of business loans and mortgages. The more that they lend, the more they can borrow from the Bank of England. Banks that are increasing their lending will pay the lowest fee on their borrowing while those that reduce their lending will pay a higher fee.
This has already had a major affect on mortgage rates which have been falling steadily. As a result fixed rate money in particular is extremely cheap at present with interest rates well below the lenders variable rate for many borrowers. If you are one of the many people who are either on the variable rate or have a deal maturing this year then now would be an excellent time to review your mortgage.
I am able to offer a FREE, no obligation review to anyone who would like to evaluate their options. Please either call or email me to arrange a mutually convenient time.