Recent data from Moneyfacts, a leading financial information provider, has revealed a significant decrease in fixed interest rates across the UK. This is a worrying trend for those looking to invest their money in a safe and secure way, as it means that the returns on investment are diminishing.
The data shows that the average two-year fixed rate mortgage has dropped from 2.93% in June 2019 to 2.50% in June 2020. This is a decrease of 0.43%, which is the biggest drop since Moneyfacts began tracking this data in 2006. Similarly, the average five-year fixed rate mortgage has dropped from 3.41% to 2.90%, a decrease of 0.51%.
This decrease in fixed interest rates is likely due to the current economic climate. With the coronavirus pandemic causing disruption to the global economy, central banks have been forced to reduce interest rates in order to stimulate economic activity and encourage people to borrow money.
The decrease in fixed interest rates is concerning for those looking to invest their money in a safe and secure way. With returns on investment diminishing, it is becoming increasingly difficult to make a profit from traditional investments such as savings accounts and bonds.
However, there are still some options available for those looking to make a return on their investments. For example, investing in stocks and shares can still be a lucrative option, as long as investors are willing to take on some risk. Similarly, investing in property can also be a good option, as long as investors are aware of the potential risks involved.
Overall, the data from Moneyfacts reveals a worrying trend for those looking to invest their money in a safe and secure way. With fixed interest rates decreasing, it is becoming increasingly difficult to make a return on traditional investments such as savings accounts and bonds. However, there are still some options available for those willing to take on some risk, such as investing in stocks and shares or property.