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HOMEOWNERS may benefit from the crisis at Northern Rock as analysts speculated UK interest rates may have peaked.

The cost of fixed-rate mortgages has been edging down during the past few weeks, and the trend continued yesterday with predictions the Bank of England’s Monetary Policy Committee (MPC) could cut interest rates in the coming months.

The US Federal Reserve on Tuesday cut the cost of borrowing by 0.5 per cent to 4.75 per cent to prevent a recession, while in the UK minutes for the MPC’s September meeting showed the rate-setters had voted unanimously to hold rates at 5.75 per cent as they decided that inflation risks had “probably receded”.

With inflation running at 1.8 per cent in August - below the Bank’s 2 per cent target - some economists predicted rates could be on the way down later this year.

Ray Boulger, of mortgage broker John Charcol, said people who did not need the certainty of fixed monthly payments would still be better off taking out a tracker. He said he would go for a deal that did not include early repayment charges so that people could switch to a fixed-rate deal when they wanted to.

Meanwhile, it emerged that the high-street bank Abbey was piloting a deal offering a 100 per cent mortgage plus a secured loan of up to £25,000, joining only a handful of lenders who advance 100 per cent.