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It's all give and take in finance and right now the ball is definitely in the court of mortgage borrowers as banks and building societies choose to reduce mortgage rates rather than up savings rates.

According to Moneyfacts, in the last few months, lenders have reduced mortgage rates. However, while borrowers benefit, savers are losing out as providers cut the savings rates they are offering in order to maintain their balance sheets.

It has found that while the average savings account, ISA and bond has lost as much as 0.23% since November 2009, the average rates on two, three and five year fixed rate mortgages and on two year tracker loans has been reduced by as much as 0.24%.

Michelle Slade, analyst at Moneyfacts says: "Savers' money was in high demand during 2009, leading many banks and building societies to offer rates as much as 10 times the base rate but no provider will offer market leading deals to both at the same time.

"Competition is slowly returning to the mortgage market with loan to values and product numbers increasing and rates falling – the focus appears to have switched back to lending and as the demand for savers' money reduces, so do the rates offered."

Of course, if you are trying to save as well as trying to manage your mortgage it isn't all good news and it can never be. The key is to manage your money with the help of a financial professional – so when you talk to your broker about the cheaper mortgages that are out there you could also ask them about where best to put your money to make it work harder too.

SOURCE: Moneyfacts, 14/01/10

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