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Fixed rates at record low levels

Official support for cheap mortgages has been scaled back as the Treasury and Bank of England announced the Funding for Lending scheme will stop providing new cheap funding triggered by extra mortgage lending from January 2014.

The Bank’s scheme has driven mortgage rates to record lows -  while decimating returns on savings.

The move to stop extra funding being taken out marks a potential beginning of the end for pumping cheap cash to consumers and could see mortgage rates begin to rise.

Funding for Lending pumps cheap cash through banks and building societies to borrowers and has driven two-year fixed mortgage rates below 1.5 per cent and five-year fixed rates to 2.5 per cent.

But borrowers have no need to panic

This move has been made as the mortgage market is firmly back on the up.

Lenders are competing for business, mortgages are easier to get and rates remain near rock bottom

In short, this is the best time to be looking for a mortgage since the credit crunch hit and Northern Rock collapsed six years ago.

By Simon Lambert

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