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6 Dec 2019

Go Direct Personal Finance News  2009

Half a year at half a percent

Bank of England base rate has been at 0.50% for six month now, but consumers have seen very little benefit.

Since 5 March 2009, consumers have been hit by falling savings rates and rising costs on mortgages, savings, personal loans, credit cards and overdrafts.

‘See appendix for changes in rates.’

Michelle Slade, spokesperson at Moneyfacts.co.uk, commented:

“Base rate has been at an all time low for six months now, but it appears that only providers are feeling any real benefit.

“Borrowers looking for a new mortgage deal have been hardest hit, as lenders continue to look to repair their balance sheets through increased margins.

“Unsecured lending costs have also increased rather than fallen, as lenders fear future increases in the number of customers defaulting.

“All customers are now paying a higher price for unsecured lending to cover the minority of customers that will actually default.

“All is not lost for borrowers as competition slowly seems to be returning to the mortgage market.

“The number of mortgages available is slowly increasing and the average arrangement fee charged has decreased.  The launch of the sub-2% HSBC deal will hopefully spur other lenders on to reduce rates and bring much needed competition back to the market.

“Banks and building societies continue to look to their savings book to fund lending activities and increased demand for savers’ money has resulted in those looking for fixed rates being offered higher rates than they were six months ago.

“While variable savings rates have fallen over the last six months, they have started to go up again in recent weeks as providers look for other avenues to attract savers’ money.

“Consumers will be hoping that as more time passes competition will become an increasing factor and that they will be offered more attractive deals across all finance areas.”


Appendix

Mortgages

 

5 March 2009

5 September 2009

Change

Fixed

Average 2 year

4.84%

5.15%

+0.31%

Average 3 year

5.36%

5.59%

+0.23%

Average 5 year

5.64%

6.22%

+0.58%

2 year margin over swaps

2.58%

3.21%

+0.63%

3 year margin over swaps

2.83%

2.98%

+0.15%

5 year margin over swaps

2.62%

2.89%

+0.27%

Trackers

Average 2 year

3.86%

3.72%

-0.14%

Average 3 year

4.15%

3.75%

-0.40%

Average 5 year

3.89%

3.72%

-0.17%

2 year margin over base

2.86%

3.22%

+0.36%

3 year margin over base

3.15%

3.25%

+0.10%

5 year margin over base

2.89%

3.22%

+0.33%

General

Average Fee

£944

£925

-£19

Average LTV

73%

73%

No Change

Number of 60% LTV Products

272

315

+43

Number of 75% LTV Products

429

509

+80

Number of 90% LTV Products

89

106

+17

Source: Moneyfacts.co.uk 8.9.09

 
Saving, loans, credit cards and current accounts

 

5 March 2009

5 September 2009

Change

Savings

Average Easy Access

0.98%

0.77%

-0.21%

Average Cash ISA (variable)

1.76%

1.46%

-0.30%

Average Fixed Rate Bond

2.71%

3.28%

+0.57%

Unsecured Personal Loan

Average Loan Rate (£5K)

11.9%

12.1%

+0.20%

Credit Cards

Average Rate

17.7%

18.1%

+0.40%

Current Accounts

Average Credit Interest Rate

0.89%

1.11%*

+0.22%

Average Overdraft Rate

13.65%

13.88%

+0.23%

* Average increased due to changes from Abbey and Alliance & Leicester who increased credit interest rates and launched new accounts paying high rates of interest.
Source: Moneyfacts.co.uk 8.9.09

 

 

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

 

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