Almost half of all brokers now believe the base rate will fall over the next 3 months, with nine out of ten asserting that rates have peaked.
“The research has found that almost half of consumers (43 per cent) are worried about securing a good mortgage or a remortgage due to the recent credit crunch," said Gerry Bell, head of mortgage marketing at GEMHL.
"It is therefore crucially important that lenders continue to work closely with brokers to understand their customers’ needs and concerns, ensuring we are providing a range of affordable products options which will allow them to make informed choices in the current environment."
This optimism also appears to be having an impact on the advice brokers are giving consumers, with discounted and tracker rates beginning to increase in popularity.
Since the beginning of August this year, fixed rates accounted for almost three quarters of all mortgage products being recommended by brokers (72 per cent) - mainly as a result of the significant number of consumers claiming to be concerned about the prospect of taking out a mortgage or remortgaging because of the recent problems in the market.
However, when looking forward to the next three months and into 2008, the number of brokers advising discount and tracker products rises by an astonishing 120 per cent, whilst fixed rates - although still accounting for the majority of sales - are expected to fall by a third.
Bell continued: "Consumers and brokers alike have clearly been concerned by the recent stress in the financial sector and our research indicates that the market is now being boosted by a possible decrease in interest rates in the coming months. This will also be welcome news to those homeowners currently coming to the end of a fixed rate product who are concerned about re-mortgage products and rates that will be available to them.”
GE Money Home Lending has lowered its fixed, discount and reversionary rates in response.
Details are as follows:
- One year discount rates starting from 6.94 per cent on NP+
- Reversionary rates reduced by maximum of 0.55 per cent on UL and L2M at 75 per cent LTV
- No HLC up to 85 per cent LTV
- Completion fee now £995
- ERC 1 & 2 year discount now 7 per cent/6 per cent
- ERC 3 year fixed now 7 per cent/6 per cent/6 per cent
