Bradford and Bingley mortgages predicts fixed rate drop

Bradford and Bingley mortgages today predicted a substantial drop in fixed mortgage rates over the coming year.

The firm expects rates to be cut as a result of increased competition as borrowers finish fixed rate two-year deals

Its quarterly review of the mortgage market also found that fixed rate schemes are set to fall in cost, having been overpriced by around .39 per cent.

Duncan Pownall, Bradford and Bingley's mortgage development manager, said: "With the recent narrowing of the pricing differential between fixed and discounted products, base rate uncertainty and the potential uplift in first-time buyers who tend to opt for security, we would expect to see the proportion of fixed-rate lending rising.

"As a consequence of this, and the fact that SWAPs are starting to fall again, we would also expect to see lenders launching more competitively priced fixed rates over the next few weeks, all vying for their slice of the mortgage cake."