As long as the market continues to accelerate and expand, endowment mortgages are fiscally sound and can pay off quite well for those who are less than concerned about their overall investment in their home and passing that investment on to loved ones. For those who are alone in the world and have little other income opportunities, an endowment mortgage can be an exceptional way to keep up with the bills. Unfortunately, with the markets in the current financial condition that they are in, it can be unwise to invest in this way as the return can be less than what you might expect and not enough to make the investment worthwhile.

Fionnuala Earley, chief economist at Nationwide, said, “There is still a great deal of uncertainty, but the Bank of England’s forecasts of growth and inflation have been widely interpreted as opening the door to rate cuts,” she adds. “We expect the next move in the Bank of England base rate to be down, but the extent to which this will revive the mortgage and housing market is likely to be limited while overall confidence in economic and housing market conditions is low.”

Peter Newland, an economist at Lehman Brothers, says: “The risks to our forecast of a 15% decline in house prices over the course of 2008 and 2009 are now squarely to the downside… We continue to expect the Bank of England to cut rates before the end of the year.”

“We have cut rates across our fixed rate mortgage range and this new suite of products deliver outstanding value to both new and existing customers,” said Karen Wint, general manager of Marketing & Customer Services at Leeds.

“There are currently many reports in the media saying the best mortgage deals are only available to those with large deposits; however we are offering very competitive deals to those with only a 10% deposit.

“We recognise that many people are struggling in the current financial climate with large increases in the cost of living,” she added.

David Cooper, Marketing Director at Just Retirement comments: “Just Retirement strives to be a leading provider of equity release solutions, offering excellent value for money. We know consumers are feeling the pinch enough at present, so we hope this gesture will help those looking to reduce outgoings and boost income in retirement. This is especially true when you combine this with the flexibility offered by Just Retirement’s drawdown product, which means individuals only pay interest on the amount they draw down and not on the overall agreed amount.

“This also highlights how equity release mortgages are now as good value as many standard mortgages. Just Retirement has been leading the industry to make these mortgages better value for all consumers.”

“With an estimated 750,000 people looking to remortgage in the second half of 2008, we are doing all we can to keep the cost of borrowing down.” said Andy Mielczarek, head of lending at HSBC. “Lowering our rates by 0.31 per cent means a saving of almost £500 a year for a homeowner with a £160,000 loan.”

But mortgages appear to be continuing to decline. “The findings of the survey show intermediaries as realistic but not unduly disheartened.” said Peter Williams, executive director of IMLA. “They recognise that mortgage volumes will be lower in the year ahead than they have been in the past and that they need to adjust their business models accordingly.”

“The credit crunch has prompted a flight to safety by borrowers who have been stung by dramatic rises in the rates on short-term deals.

“At the same time lenders are increasingly keen on signing customers up to long-term deals which offer them certainty,” explained Sean Gardner, director of MoneyExpert.com.

“Long-term fixed-rate mortgages are no longer an oddity. And with competitive rates of interest in some circumstances they may well be worth considering,” concluded Mr Gardener.

A statement from the Federal Reserve on the bailout read in part, “This could be an important bedrock for stability in the financial sector as a whole – a sector which has suffered greatly due to the credit crunch. The implications for the UK are sizeable, because stability for US financial institutions will inevitably help to stabilise the situation in Europe.

“If confidence is gradually restored and institutions start to lend to each other and to individuals more willingly, then we will not only start to see the beginnings of a recovery in share prices of banks, but also housing transactions and general lending will start to pick up again, and recession may be avoided.”

“It is clear from Council of Mortgage Lenders figures this week that many borrowers are sitting tight and refusing to re-mortgage at the moment as they wait for better rates to come along. However, if customers are sitting on high standard variable rates having come to the end of a promotional period, they would be better switching to a Lifetime Tracker which has all the flexibility of SVR but a much better rate,” stated Andy Gray, the Head of Mortgages with the bank Woolrich.

He added, “The two year fixed rate market is hugely volatile at the moment. We have decided that our customers will be better served by other products such as the Lifetime Tracker which offers a much lower rate and full flexibility to change to another rate at a later time.”

Louise Cuming, head of mortgages at moneysupermarket.com, said: “Tying customers into a current account with the lure of an attractive mortgage product range is a clever move by the Co-operative Bank. By targeting its current account customers, the Co-op can cherry pick the most financially sound applicants, so its market leading rate will only be available to market-leading applicants. Co-op customers with equity or a sizeable deposit will be laughing as they are eligible for the 5.99% mortgage rate. But borrowers without these will pay much higher rates - further widening the gap between the haves and have-nots.”

Ann Robinson, of uSwitch, said: ‘This is a real catch-22 for consumers who are struggling to find the funds to pay mortgage set-up costs. By allowing consumers to add fees onto the mortgage, it could be argued that providers are doing them a good turn. This is particularly true for first time buyers where it could mean the difference between getting on the property ladder or not.

‘However, adding fees to a mortgage means that you will be spreading the amount over many years and paying interest for the pleasure of doing so - this is an extremely expensive option and should always be seen as a last resort.”