The big freeze continues into september but don't rule out a cut in the coming months, says charcol

THE BIG FREEZE CONTINUES INTO SEPTEMBER BUT DON'T RULE OUT A CUT IN THE COMING MONTHS, SAYS CHARCOL Ray Boulger of Charcol comments on today's Base Rate freeze at 4%; "Today's freeze was generally unsurprising. Clearly there hasn't been enough change in the UK economy in the last month to warrant a cut, despite the FTSE's dip below the 4,000 mark once again. "However, we don't rule out a cut in interest rates in the coming months. Stockmarkets are still very sensitive as we have seen this week, but more importantly the UK economy has shown little signs of recovery and the performance of the US economy is an increasing concern. If the Fed cuts later this month, this will influence the next MPC decision in October. Now that rate of growth in house prices is showing early signs of slowing down, what was widely speculated as the main inhibiting factor for a Base Rate cut in previous months is no longer present." What should borrowers do now? Fixed rates have fallen sharply over the past month and the gap between fixed rates and discount or tracker products has narrowed considerably. All types of borrowers now have access to some of the lowest mortgage rates of all time. With the possibility of a further base rate cut, base rate trackers have the distinct advantage of guaranteeing that borrowers will benefit fully from any future cuts. However, together with low rates has come increased innovation and there are now a number of products offering a happy medium between variable and fixed rates. A prime example is Yorkshire Building Society's 3 year 4.25% tracker rate with a droplock option to switch at any time into a pre-agreed fixed rate of 4.99% without incurring penalties. Product examples: Charcol exclusive - Stepped Base Rate Tracker with an initial pay-rate of 3.10%. Bank Base - 0.90% until 31/10/03 for loans over £150,000. (full details below). Yorkshire Building Society - Tracker with "Drop-Lock" option. Bank Base + 0.25%, giving a current pay-rate of 4.25% until 30/11/05 with the ability to lock into a guaranteed fixed rate of 4.99% at anytime (full details below). Borrowers should contact 0800 71 81 91 or visit www.charcolonline.co.uk For further information please contact: Ray Boulger or Richard Winder/Ali Merrigan Senior Technical Manager - Mortgages Lansons Communications 020 7550 6643 / 07977 277 431 020 7294 3641 / 020 7294 3634 Alison Cooley/ Karen Garner - Charcol press office: 020 7550 6748 / 6749 NOTES TO EDITORS - TYPICAL EXAMPLES AVAILABLE ON REQUEST TRACKER DETAILS Rate : Bank Base Rate - 0.90% to 31/10/03 = a current pay-rate of 3.10% (5.3% APR), Followed by Bank Base Rate + 0.40% to 31/10/05 ( therefore average pay-rate of Bank Base Rate - 0.03%) Max LTV : 75% MIG : None Lender fee : £295 Charcol booking fee : £49 Early redemption charge : 3/2/1% to 31/10/05, can repay up to 10% p.a. penalty free Minimum loan : £150,000 Features NB : Also available for loans from £50,000 at Base Rate - 0.70% to 31/10/03 followed by Base Rate + 0.60% to 31/10/05 with a £195 lender fee. Other details as above. YORKSHIRE BUILDING SOCIETY - TRACKER WITH DROPLOCK DETAILS Rate : Base Rate + 0.25% 30/11/05 = a current pay-rate of 4.25% (5.4% APR), Option to switch to a guaranteed fixed rate of 4.99% anytime up to 30/11/05. Max LTV : 95% MIG : Free to 90% Lender fee : £325 (arrangement fee of £75 on application, £250 on completion) Early redemption : 3% to 30/11/05, unlimited penalty free part charge redemptions permitted. Features : Flexible. NB : Fees free option available at Bank Base + 0.65% to 30/11/05, a £250 cashback, a refund of valuation fee up to £250 and no lender's arrangement or booking fee. NB: Exclusive products are exclusive to the Bradford & Bingley Group. Charcol will charge a broker fee of up to 1% on completion (nb: the average fee charged in 2001 was below 0.5%). No fee is charged for mortgages purchased online at www.charcolonline.co.uk. Typical examples for products detailed in this release available on request. Mortgage secured on property. Minimum age 18. Insurance may be required. Loans subject to status, type and value of property. Written quotations available on request. YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/09/05/20020905BIT00590/wkr0001.doc http://www.waymaker.net/bitonline/2002/09/05/20020905BIT00590/wkr0002.pdf