Mortgage rates drop for potential homebuyers

The rates of mortgages have continued to fall, a report has shown, which will come as good news to people looking to purchase properties for sale in the UK.

Earlier this week, Moneyfacts revealed that over the last year, charges on home loans have dropped.

It reported that in December 2009, the rate on a two-year fixed deal was 0.53 per cent higher than it is at the moment.

For people interested in a three-year fixed-rate deal, the average rate has dropped by 0.59 per cent during the period to 5.01 per cent.

Five-year fixed-rates declined the most, falling by 0.86 per cent since last year to 5.29 per cent.

This comes after First Direct suggested last month that fixed-rate mortgages could grow in popularity in 2011, as more people have begun to take up this type of home loan.

Findings revealed that the sales of fixed-rate mortgages grew to 33 per cent of all property finances taken out in October, compared with 25 per cent of home loans on average during 2010.