Mortgage rates have fallen sharply since the launch of the Funding for Lending scheme (FLS), according to date published this week by the Bank of England.
Figures show that the cost of a fixed rate mortgage at 75% loan-to-value (LTV) has declined by around 80 basis points over the last year, while the cost of a 90% LTV load is down by even more – at almost 100 basis points.
The data showed that, in the first quarter of this year, 13 firms drew down £2.6 billion. However, some commentators were disappointed that net lending by the 40 groups participating in the scheme declined by £0.3 billion during the quarter. But, in its press release revealing the latest data, the Bank reminded the markets that the original aim of the FLS was to encourage more lending to the UK economy than would have happened without the introduction of the scheme.
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