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Five year fixed mortgage rates go below 3.5%

[ Posted July 28th, 2011 ]

Over two years have passed since the Bank of England Rate hit its lowest ever rate of .5%, and lending agents are now finally passing on the rate savings to their customers by offering the best mortgage rates ever to those that are qualified to take out a new home mortgage, or at least refinance the mortgages they currently hold. The latest banking institute to drop their rates is the Yorkshire Building Society which is now offering consumers two new low mortgage rates for those who hold fixed mortgage loans.

The first offering is based on a five year term and requires a fixed mortgage in order to get the low mortgage rate of 3.49, with an attached arrangement fee added in to the final deal. Director for Private Finance, Melanie Bien, stated that the new deal is surprising given the fact that it had looked as if the five year term rates had gone down as low as they would for quite some time, but then out of nowhere comes another deal that ploughs right under the 3.5% wall making it an excellent deal for those that can take advantage of it.

Bien added that the low mortgage terms for fixed mortgages offered by Yorkshire Building Society is a good representation of the fact that the money market continues to drop forcing the lenders to in turn drop their rates to try to get more business through their doors during the midpoint of the financial year. In order to get the low mortgage rate however potential applicants must be able to put down a 25% deposit on the home which will leave a great deal of buyers out of the deal who cannot get the capital together.

Although not everyone is going to be able to take advantage of this great rate, those who can and have the equity to do so should make a move on it given the fact that it is highly unlikely that better mortgage rates are going to spring up over the next few months. This is especially due to the fact that the interest rate is still hovering and could potentially start to go back up. In addition this deal, Yorkshire is currently also offering a two year fixed mortgage low rate of just 2.79% for those who can meet the same qualifying terms.

How to search out a commercial mortgage loan

[ Posted July 22nd, 2011 ]

There are many different financial institutions that offer prospective business owners and developers commercial mortgage loans, but each offers different rates and terms making it hard to determine which the best choice is for your company.  The good news is that there is a large opportunity for borrowers right now as the general commercial rate is down on mortgages and a great deal of information available regarding the options so that you can make an educated choice when it comes to choosing the terms of your commercial mortgage.

One of the first things that you should do as a potential borrower is take the time to perform some research and investigation before meeting with any lenders to save you time and make sure that you are not talked into a deal that is not actually the best for you.  By taking the time to look for the best commercial mortgage rates prior to any meetings with lenders you can make sure that when you take the time to meet with a lender it is for one that is an honest and affordable option for your business.  Luckily, the internet has made this task much simpler than it used to be.

There are many websites available online that allow you to quickly offer your details and specifics about the type of mortgage that you are after.  Some of these websites will actually search the internet for you offering the lowest rates form a variety of different vendors and also ascertaining if you are a likely candidate for any of these loans.  In addition, they can also help you get in touch with various lenders so that you can make your own comparisons and decide which lenders are worth your time scheduling a meeting with.

If you are not comfortable with heading online to look and compare the various commercial mortgage rates that are available for your type of purchase, you can also check with your local bank as a good starting point and ask to meet with a lender.  It can be helpful to at least meet with a professional lender even if you do not intend on taking out your loan from that bank so that you can get an answer to any questions about the terms of a mortgage an what some of the terms mean before making a final decision.

New ‘mates’ mortgage product hits the market

[ Posted July 19th, 2011 ]

Clydesdale has announced a new LTV mortgage product that will allow first time buyers another way to get a leg up on the mortgage market with their new ‘mates’ mortgage option.  Designed to offer some of the best mortgage rates on the market to first time home buyers and to help those who otherwise could not get into the housing market get a chance to purchase a home, the new product offers deals that are as low as 9% LTV rates free of any security fees that are generally attached to any mortgage product.

Those interested in the new product will be intrigued to find out that for fixed mortgages the rate starts at 5.49% with a standard variable fee of £999.  Those that are willing to take on a variable rate will find a two year rate at 4.49% also with an attached fee that totals £999.  Both of these new mortgage products can be utilized for loans that are up to £500,000 in value.  They are all offered under the same title of the professional FTB and are equivalent to the new building project mortgages although they allow for a higher loan value.

In order to qualify for one of the new products from Clydesdale borrowers must be employed in one of several professional occupations such as barristers, pilots, accountants, solicitors, dentists, optometrists, pharmacists, chartered surveyors, doctors, vets, or actuaries.  Head of B2B mortgage strategy for Clydesdale Bank, John Tooth, stated that the new mortgage rates and products were introduced after it was seen that there is a high need for higher LTV on some mortgage plans within certain sectors of the market which he believes the new products will help fill.

Each of the new ‘mates’ mortgage products are offered via a partnership with Barratt, Taylor Wimpey, and Persimmon the house building companies who offer the products to members from their broker panels of which Clydesdale is one.  The aim is to address the needs of professionals who may want a more high market product and a better rate attached to their mortgage.  Due to the lag in the mortgage market homes with high mortgage values have not been addressed as they are not seen to be the normal acquisition for homebuyers today.

Low mortgage rates have hurt savers across Britain

[ Posted July 13th, 2011 ]

Since the Bank of England slashed the interest rate down to just .5% to help steady the economy and improve the housing market, savers have been hit harshly as their savings are not generating any yields.  While the news that the interest rate is staying stable is good news for those with tracker mortgages that are worried about escalating mortgage rates, for those in their golden years who are worried about their savings funds the news is not quite so golden.  In fact, this is the 29th month in a row that the rates have remained this low.

The hardest hit were those in their golden years who have reached retirement years since many manage to pay off their mortgages before they reach this age.  As a result, they are not worried about finding the best mortgage rates but are hurt severely by the fact that the interest they assumed would continue to build at around 3.4% was lost as they watch their savings dwindle without any clear sign in the future that it will rebuild.  Even though the Bank of England is expected to increase the mortgage rate next year, for those hurt there will be no way to recover the lost interest.

This has created quite a clash between those who are worried about the mortgage market and those that are concerned about the savings market as groups such as Save Our Savers have been campaigning to change the interest rate before it permanently damages the savings culture in Britain.  According to one of the leaders of the group, Jason Riddle, at the moment the current interest rates may be helping those with tracker mortgages but it is only helping rich savers who can afford to invest their savings making it useless for anyone else to even consider the idea of building a savings account.

More astounding is the fact that savers are thought to be more frequent than mortgage borrowers by about a figure of seven to one which means that protecting those with fixed mortgages while letting the savers suffer may not be the one.  However, the threat of a potential rise in foreclosures again could be just as crippling to the weak market which is why as of now a move has not yet been made in either direction.

High rate taxpayers attracted to offset mortgages

[ Posted July 12th, 2011 ]

Low interest rates, rising inflation, and tougher competition among lenders has made many high rate taxpayers take advantage of offset mortgages.  This week those holding their breathes about the potential increase in mortgage rates got a gentle reprieve as the Bank of England held the base rate at its current .5% mark for another week although the CPI or consumer prices index  is running steady at 4.5%.  This has made it hard for those who fall into the bracket of wealthy to see any real tangible returns on their savings accounts.

Therefore, it is only logical that instead of placing their funds into savings accounts now those who fit into the higher tax brackets are instead taking a closer look at the changing mortgage rate and deciding instead to place their cash on their mortgage to reduce the interest.  Director of the mortgage firm Private Finance and broker Melanie Bien stated that as it is unlikely that interest rates will actually increase before the year ends most savings accounts are going to continue to offer low returns making it more beneficial for borrowers to put their savings to work on their mortgage.

The way an offset mortgage works is simple as the borrower can deduct the savings out of the loan amount and then the homeowner benefits since they now only have to pay interest on the much smaller balance that has been reduced.  Thus, if you had a linked savings account that was worth £50,000 on a mortgage worth £450,000 then the interest and mortgage rates would only be attached to £400,000 making it a beneficial plan in the long run.  The only trouble of course with this method is that it only works for those who have a great deal of excess cash to work with.

Those that earn over £150,000 and are currently paying the top rate for income tax are usually those that can benefit the most from offset mortgages because they will be able to earn some type of break on the mortgage without any tax liability.  This is due to the fact that if they place it in a poorly earning savings account instead they will still be liable for income tax making the amount they get overall much lower than when compared to what they would save on their mortgage interest.

Beware of low mortgage rates with attached fees

[ Posted July 6th, 2011 ]

Over the last week many lenders including the giant Nationwide have been slashing their mortgage rates in an attempt to get mortgage seekers back in their doors.  As the economy and the housing market slowly starts to show signs of growth everyone wants in on a piece of the action and the draw is very hard for many companies to ignore.  However, despite this fact, new mortgage seekers may want to pay attention to the deal that they are really getting because low rates is not always the best sign.

This is due to the fact that low rates alone are not enough to signify that a buyer is getting a great deal when it comes to signing into fixed mortgage ratesWhat many lenders are actually doing is dropping their rates but as a result increasing their product fees which can end up hurting even more if you look at the average savings over a five or three year termed mortgage.  Although the swap rates are down allowing lenders to more competitively price their loans, those with a secular interest are still out of borrowers’ money and the smart borrower will know to beware.

The reason why is easy to see if you take a look at an offer for a mortgage with a low mortgage rate that has an attached product fee of about £1200 or higher.  If the new rate is only a slight decrease by about.5% and you save twenty dollars a month over taking the higher mortgage rate, but pay £1200 upfront you will end up worse off than if you had taken the higher interest rate without a product fee.  Therefore, it is very important to pay attention to the fine details before choosing the best deal for your company.

Nationwide reduces their mortgage rates

[ Posted July 5th, 2011 ]

Nationwide is the latest in the long list of lenders to cut back their mortgage rates over the last few months announcing that they also are going to offer homeowners a break by slashing prices for all of their five year loans.  The lender cut the interest that is payable on all mortgage loans taken out by those with Nationwide down to a mere 3.89% which makes their loan products more on par with what their competitors are also offering at the moment.  This should help new home owners get their foot back onto the property ladder.

The new mortgage rates are available to those who seek fixed mortgages as well as those who are in need of tracker mortgages.  Most of the cuts that were assigned to the five year loans cut down the average rates by a total of about .65% marking a significant change in the mortgage market.  Also seeing a reduction were three year fixed rate mortgages that were reduced down to a total of 3.59% with an attached £99 booking fee and another £900 product fee.  Therefore, while there may be more attached fees, monthly payments should stay down overall.

Technical manager at John Charcol the mortgage broker, Ray Boulger, stated that the company has been expecting a great deal of lenders to reduce their mortgage rates over the last few weeks because as the swap rates continue to fall lenders are able to offer better and more competitive rates to their customers.  He added that outside of Nationwide, the company expects a great deal of additional lenders to also cut their rates making it worthwhile for those that are seeking a home mortgage to wait it out a bit and see what lender can offer them the best deal overall.

 
 
 
 
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