At last, some good news for homebuyers

FIXED-RATE mortgages offered to some borrowers came down in price last month for the first time since February, figures from the Bank of England confirmed yesterday.

The average interest rate on a two-year deal stood at 6.36 per cent for borrowers who put down a deposit of 25 per cent of the property price, down from 6.46 per cent in June.

Fixed-rate mortgages still cost more than they did a year ago, but they are down significantly from the eight-and-a-half-year high of 6.6 per cent that they hit in June.

Many high-street lenders have been cutting their rates in the past few weeks, among them Halifax, Abbey, Royal Bank of Scotland and its NatWest subsidiary.

Experts also said there had been an increasing choice in the market, as the mortgage drought started to ease.

Rates are coming down despite Bank of England policymakers keeping the bank base rate on hold for the fourth month in a row, at 5 per cent.

The falls are being seen as a response to declines of nearly 1 per cent in swap rates, on which the loans are based. Swap rates tend to track the rate at which banks lend to each other.