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Lenders start to drop rates

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  • 27/09/2002
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The gap between fixed and discount rate products is set to fall further, despite the bank base rate ...

The gap between fixed and discount rate products is set to fall further, despite the bank base rate (BBR) remaining static. The best of two and five-year fixed rate deals have dropped by 0.85% and 0.7% respectively in the last three months, according to Charcol. The broker predicts more lenders will follow suit in coming weeks.

Ray Boulger, senior technical manager at Charcol, said: ‘The premium borrowers pay for the security of a fixed rate has decreased rapidly over recent weeks. For most of 2002 the differential between the best discounts and the best two-year fixed rate has been 1%. This has reduced to less than 0.4% and five-year fixes, which start at 4.69%, are the lowest today’s borrowers will have ever seen.’

He added: ‘Fixed rate prices always start to move up before BBR. Sometimes it is better to bite the bullet and take a good deal close to the bottom, rather than miss out by waiting too long.’


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