The total percentage of mortgages approved in March rose by 5% as compared to the previous month. As per the British Bankers’ Association the total purchases in March were of 34,905. They further added that low interest rates affected consumer behavior drastically.

There was a 5.7% yearly drop in lending to non-financial companies by major banks. The real estate sector though is facing a high amount of housing demands as people are putting up their homes for sale.

As per British Bankers’ Association (BBA) figures the gross mortgage lending in March – of £8.7 billion was less than the average of the past six months.

The banks are actively encouraging borrowers to use surplus cash to reduce their borrowing. Home owners are exactly doing this by making higher repayments with the extra cash generated from low mortgage rates.

Remortgaging continued to be on a steady rise but at low levels. As per reports 2 year fixed-rate mortgage deals are at their cheapest for 12 months. The interest rates are at 4.36% for a £150,000 repayment mortgage.

Lenders are still lending mortgages at low interest rates as there is a lot of competition, it is better to have customers than having no customers at all because of high interest rates. Financial experts also add that low interest rates affect savings and borrowings which are not secured on homes.

The existing direct saving customers who have opened their accounts in the bank in the past 6 months will earn up to 0.4% not the new higher rate.

However AA Internet extra pays a slightly higher 2.24 % (2.8%) including a 12-month introductory bonus which can be used only over the internet.

The latest ING Direct Savings deal guarantees a fixed rate for one year period. After a year the money will have to be moved and standard 0.4% rate will be given.

People who opted for the 2% interest offer last year will now come down to the standard 0.4%.

Some savers in Alliance & Leicester Online Saver 4 saw their bonus disappeared earlier this month and now earn 0.4 % (0.5 %) on balances up to £25,000.

There is also a new saving account scheme started by Northern rock for children which offers 3% interest with a minimum investment of £1.

A lot of enticing and money making schemes have flooded the markets. The decision to choose the best is ultimately left to the customers. For some the fixed rate one year policy works the best while some risk takers go ahead with variable interest rates.