There appear to be indications that low interest loans may be returning. Although the changes are not yet widespread, there are many banks that are starting to offer low interest loans again and there are high hopes that other banks will follow suit. Even though the Bank of England did not lower rates this week, many banks are finally taking that step on their own and bringing low interest loans back. The next few months will be telling as to whether this trend will continue or if rates will go back up as well as fees.
Richard Morea of broker London and Country said: “Banks are more willing to lend as rates in the wholesale markets have come down.”
Melanie Bien at broker Savills Private Finance, said: “With swap rates continuing to fall, the big lenders with strong balance sheets and an appetite to lend are likely to carry on reducing their fixed rates and some trackers.”
Bien added: “If you can afford to be wrong — that is, if rates rise you will be able to afford it — a tracker is cheaper, at least initially, and may make better sense in the long run.”
Related reading: Low Interest Loan
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