London (shakespearefinance) March 10, 2008: The data shows that while the borrowers have been hit severely by the credit crunch, the savers are having good times. According to the price comparison site MoneyExpert.com, the interest rates on savings accounts have increased 1.2% on an average since January 2007. The typical rate on a savings balance of 1,000 pounds has increased to 3.87% from 2.67%.
However, it is just the opposite in case of consumers seeking loans and mortgages. Experts say that the era of cheap loans is now over and even when the market conditions settle down in due course, it is unlikely that the pre-credit crunch levels would be restored. On an average, the interest rate on two-year fixed-rate mortgage has increased by 0.62% since January 2007, bringing it to 6.17% from 5.55%.
Sean Gardner, the Chief executive at MoneyExpert.com, said: “The credit crunch has produced plenty of losers, but there are some winners too. Average rates on savings have rocketed as finance firms try to raise cash after the money markets seized up.”
The financial data website says that one-third of the lenders have cut their loan-to-values they were willing to offer in the past. The first time buyers have been severely hit by this move. The initial deposit required to buy home has become very difficult to arrange for many of the first time buyers.
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