Michelle Slade, spokesperson for Moneyfacts, said borrowers hope that lenders will continue to reduce the perceived excessive margin for risk and that the tentative steps being taken to offer competitive rates at higher LTV levels will continue
Competition had returned to the market in the last month as lenders became more accustomed to the post- banking crisis world, she said.
Slade described 2009 as a mixed bag for mortgages borrowers, with borrowers on existing tracker mortgages deals celebrating while those looking to secure a fixed-rate deal seeing rates steadily increasing during the year.
She said bank rate falling to an all time low meant those on existing tracker deals and standard variable rates as low as 2.50% saw repayments plummet.
She concluded: “Many borrowers are seeing this low interest environment as an ideal opportunity to overpay on their mortgages contrary to the Bank of England’s ideal, which would have borrowers go out and spend.”
