Savers sacrificed for historically low mortgage rates

Author: Anna Bowes
20th March 2015

News that fixed rate mortgages hit new low levels is great news for homeowners (see how you can benefit below), but more bad news for savers. To add to savers concerns, David Cameron has pledged to keep mortgage rates low should the Conservatives win power in the up and coming general election.

The knock on effect of this is savings, including fixed rate savings, have been falling almost month on month with the average one year fixed rate now dipping under the best easy access rate of 1.40% (1.37%).

It’s just another signal of how much the savings market has gone wrong in recent years. Fixed rate bonds, like most savings accounts, have been hit hard with rate reductions.

The hope that the recent launch of the NS&I 65+ Guaranteed Growth Bonds (Pensioner Bonds) might encourage some competition in the market has proved fruitless, as fixed rates continue their downward spiral. With the rates on offer from NS&I so competitive, like for like best buy 3 years bonds would need to rise by almost 60% in order to compete, so it’s fair to say providers aren’t even trying. ¹

Saving in the current climate calls for a balanced approach. With restrictions on so many of the very best rates available it’s sensible to start from the top down; using high interest paying current accounts and a mixture of top paying fixed rates and accessible variable rates, in order to access the best rates available now, with some money set aside should better rates become available down the line.

How homeowners can benefit

With mortgage rates at historic low levels, we’ve launched a range of mortgage tools so readers can now search online for the best deals.

We've teamed up with London & Country, the UK's leading fee free mortgage broker, to offer you expert independent advice on the right mortgage deal. Whether you're buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you'll pay no fee for their advice.

As well as mortgage best buy tables, the calculators allow prospective borrowers to work out how much they can borrow, a house price calculator and a buy-to-let calculator.

Click here to find the best mortgage deal for you


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