Source: Moneyfacts

After a period of weeks where most lenders were increasing their rates almost every week and fixed rate mortgages went out of favour after being the preferred deal for borrowers over several years, we are finally seeing some mortgage providers reducing rates.

Source: Moneyfacts

Even though interest rates have reduced three times recently, mortgages are still getting more expensive generally. This is largely due to decreased confidence in the money markets.Once that confidence returns we may see product rates falling into line with the downward trend in base rates. Looking back at our rate review for September 2008 the best mortgages look generally similar for fixed rate and discounted variable rate products, but you'll notice a significant jump in the costs for self-certified mortgages. This is a symptom of lenders wanting to avoid those types of borrowers or at least cover the increased risk with higher interest charges.

Mortgages are under review at the moment following the changes in financial markets. Although the Bank of England kept interest rates stable in September 2007, several mortgage lenders have decided to increase rates slightly to cater for the increased cost of credit on the wholesale money markets.