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Five year fixed mortgages at a low

[ Posted April 24th, 2012 ]

Over the past year the average mortgage rate of a fixed product has fallen down by about .8% dropping overall from 5.6% down to 4.86% which makes a large difference for those in the market for a long term fixed product.

The fall in the five year fixed term should be of interest to savvy homeowners with a mortgage that is on a standard variable rate given the fact that many of the larger lenders and a handful of the smaller lenders have announced that they will increase their SVRs come May 1st.

Moneyfacts.co.uk spokesperson Louise Holmes stated that the average fixed mortgage rate has been coming down over the last few years and they are currently at the lowest that the market has seen them in the past two years.

She added that fixed mortgages are particularly interesting to those that like knowing what their monthly payment is going to be for a certain designated period of time regardless of how the market performs.  She also stated that this makes it easier to play for a financial budget since the repayment amount does not fluctuate over time requiring adjustment in the family budget.

One of the reasons that lenders are able to offer the best mortgage rates on fixed products is due to the fact that the price of lending in the swap rate market has lowered over the last few years helping out lenders that offer long term mortgage products.

Combined with the fact that the Bank of England is expected to keep the interest rate set at the low .5% for at least the rest of the year if not longer, borrowers should take advantage of the low rates while they are still available on the market.

Chief Executive for SPF Private Clients, mortgage broker Mark Harris stated that a five year deal is a logical length of time for the borrower that wants the certainty that comes with a fixed rate mortgage product.

He explained that a two year fix is not going to be that helpful since rates likely will not start to change until the two years are up and added that long term mortgages of ten years or more can be tricky. However, given the fact that there will be changes in the market over the next five years locking into a deal now can be a great way to get low rates and security.

Legal & General Mortgage Club offers new buy to let mortgage rates

[ Posted March 8th, 2012 ]

Although the general concern in the property market is that mortgage rates are increasing, for those who are still looking to invest in property a new set of deals from Legal & General Mortgage Club, that are sponsored via Platform, may be the solution. The new deals are designed for those looking for a variety of buy to let products and start as low as 3.69% with an LTV of 60%-75% attached. As the mortgage rates attached to most loans are expected to continue to increase now may be the time to take a look at the offerings.

One unique thing about the buy to let deals from Legal & General Mortgage Club is that they are all fixed mortgages which can be a nice way to fix expenses over the next two years.  The lowest rate available as mentioned is 3.69% for those that can afford a 60% LTV.  From there they slowly creep upwards for those who may need a loan that comes with a small upfront investment ending at 4.69% for a 75% LTV.

In the middle for those who may be able to afford a smaller LTV there is a 65% LTV that comes at the rate of 4.09% and a 70% LTV that comes with a 4.29% rate. All of the buy to let mortgage rates come with the added administration fee set at £89 that is not refundable, an arrangement fee of £2450, and are set for two years.

In addition, free standard legal service and valuation is offered to customers that are considering remortgaging their properties. The head of mortgage products for L&G stated that the products all come with a flat fee with aggressive pricing in place to encourage the growing buy to let market, and Platform and L&G are working together to help satisfy the demand.

Product marketing manager for Platform, Nick Allen stated that the aim of the company is to increase lending for those that want to invest in the buy to let sector. By the end of the year they hope to have increased their lending by about a third to help match the demand that a great deal of brokers are seeing. Allen added that they will continue to offer products that they believe will be popular for use with other intermediaries.

Mervyn King concerned mortgage rates will soar

[ Posted December 1st, 2011 ]

Sir Mervyn King spoke out this week stating that in the face of the eurozone crisis most mortgage rates are going to increase despite efforts and statements by the UK government that public lending costs need to be kept in check.  According to king, the eurozone crisis is now past control and the Bank of England is readying itself for a worst case scenario should the bottom fall out on the lending situation and the debt crisis.  The news gets worse as Downing Street claims that Britain is now facing its second credit crunch in just four years.

King is mostly concerned that the crisis in the Eurozone is hurting Britain with the financial policy committee in England concerned that the higher borrowing rates that banks are facing will be passed onto to the public over the next few months.  The end result is going to be that the average family is going to have to deal with a much larger mortgage rate than anticipated.  Just a few months ago many experts were claiming that an increase in the base rate would not be seen until late into 2012, but now the outlook has changed due to the Eurozone debt crisis.

According to King, there is about £500 billion from the British banks tied up in European institutions which means there is a great deal of potential for upheaval.   He continued to warn that the situation was getting out of control and that there was is little that the British government can do at this moment to try to control costs.  He explained that the conditions within the markets are starting to look similar to a systemic crisis.  He added that the crisis is allowing people to see the costs of financial instability to the mortgage market.

The governor of the Bank responded to the news by ordering all banks in the US to stop handing out bonuses to their staff members in an effort to reduce costs and attempt to keep the mortgage rates down for the time being.  He also stated that lenders need to protect themselves by putting their houses in order to help protect themselves from the upcoming threat of the financial storm that is likely to be unleashed within the next few months although at the same time he advised banks to continue to lend money in an effort to maintain the small increase in the stale mortgage market that has been seen this year.

Fixed mortgages are not enough to stabilise housing market

[ Posted October 22nd, 2011 ]

As of late, many lenders and mortgage brokers are offering long term fixed mortgages at reasonable rates of up to ten years to help draw potential homeowners back to the market.  The aim of these long term mortgage contracts is to offer mortgage holders the security of knowing that they will be able to afford their mortgage payments for a significant amount of time, making them more comfortable with the idea of making such a large investment.

However, this action has been met with great debate including many people who feel that it will not actually be effectual. Behind the push for long term fixed mortgages has been Housing Minister Grant Shapps, who feels that long term mortgages offer people comfort and the security of knowing how to budget for a significant period of time.  Despite this fact, many experts have compiled proof that suggests that most borrowers actually fear the idea of taking out a long term mortgage.

The issue was brought to a new light this past week as Shapps asked lenders on Thursday to consider offering thirty year fixed mortgage products to borrowers to offer them certainty and security.  According to Shapps, this effort would help give the first time homeowner buying market a boost.

Mortgage expert Melanie Bien from Private Finance, the advisory group, stated that politicians seem to believe that long term fixed products will help to stabilise the market, but most borrowers that choose fixed products prefer the shorter terms such as two to five year deals.  She added this is because if you choose a longer term fix and then decide to pay it off buyers face a very large early repayment charge that can total up to thousands of pounds, making it a poor way to save money.

Bien also added that most longer term fixed products do not offer enough flexibility for people that do not know what they will be doing or where they will be living in the next few years, let alone in a thirty year span.  Given the charges for ending a mortgage contract early and the fact that most people do not stay in the same location for thirty years, there is a high price tag to pay for security that most people are unwilling to consider.

Mortgage rates dive again

[ Posted August 9th, 2011 ]

At a time when it seems that mortgage rates cannot get any lower, and most experts predicting on a weekly basis that they will not get any lower, the average rates have dropped again making now an even better time to consider taking out a mortgage or refinancing one that you already have.  Eventually the rates are going to go back up as the Bank of England will be forced to increase the base rate, but until that happens there is still time to take advantage of many of the great mortgage deals that are currently out there on the market.

One such deal is being offered by Nationwide who just announced this week that they will slash their rates on all of their five year fixed mortgages and even some two year trackers for those that are able to take advantage of them.  The new rates mean that those in search of a great mortgage deal can now sign into a five year fixed mortgage at the low rate of just under 4% at 3.99% with LTV (loan to value) ratios that are as low as 70% with the low cost booking fee of just £99.

Head of mortgages for Nationwide Martyn Dyson stated that the new fixed mortgages are a great idea for customers that want the security of knowing what their financial situation will look like over the next few years.  He added that the company realizes that in these uncertain economic times it can be stressful to take out a mortgage that comes with an unsecured rate as it can have negative effects on your financial well bring, thus the company decided to slash rates on fixed mortgages to help allow these customers to get a leg up on the market.

Dyson added that Nationwide also decided to reduce the rate on their variable mortgage packages so that consumers can take advantage of the low interest rates while they last. Even mortgages for self build have come down. In addition, they have also added in a ‘switch & fix’ option to their variable mortgage products so that customers can switch into a fixed rate mortgage if they feel the need to without worrying about being charged an extra repayment charge for early termination of their mortgage loan.  This is just one of the many companies that offer great low interest deals to consumers, but now is the time to start looking if you are thinking about signing into a new mortgage.

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.

Confidence in housing market reflecting in house prices

[ Posted June 21st, 2011 ]

After floundering for two years, the housing market is starting to once again improve as most Britons seem to be gaining confidence in it.  A new survey conducted by Halifax, the high street bank, revealed that one third of Britons expects to see house prices continue to increase.  About 32% of those included in the survey felt that property values would steadily rise over the next year compared to 26% who predicted that they would remain the same and another 23% who felt that house prices will actually start to fall over the next year.

Most people were more positive about house prices in the area where they live locally with 35% stating that they would see their local housing prices increase and only 18% reporting that they would see their local area fall in price.  However, whether the survey respondents thought the housing market would increase or decrease most people did not expect to see large changes in housing prices or the mortgage rate with an overwhelming amount of 57% stating that they will expect to see only falls or rises by 5%.  Only 24% of those in the survey predicted they would see larger changes.

The survey also showed that people seem split in regards to what they think of the housing market, as half thought the next three months would be a good time to purchase a home and another half stating that now would be a good time to sell property.  However, with the threat of the interest rate affecting mortgage rates and the tough lending criteria still in place for many candidates consumer confidence is still low enough that most people are delaying purchasing a new home keeping the overall number of housing transactions low.

Compounding matters is the fact that 26% believed their finances would get worse over the next quarter and another 54% that stated they did not think they would get any better.  Another 52% stated that worries over job redundancy would prevent them from purchasing a new home or taking advantage of excellent buy to let mortgage rates to make a solid investment in the housing market.  An additional 225 stated that the threat of the interest rates increasing prevented them from making the move to sign into a new mortgage for the time being.

Fixed mortgages at a six-month low

[ Posted June 20th, 2011 ]

Increased competition within the mortgage market in terms of lending has le to homeowners rushing in to take advantage of the best mortgage rates before the interest rate rises in the future according to new figures.  The Bank of England is expected to increase the base increase rate sometime in the next six months leading to a rash of people attempting to switch their mortgages to a fixed mortgage before the rate hike affects their tracker mortgage monthly payments.  Estimates predict that a simple .5%-1% increase in the interest rate could lead to monthly mortgage payments jumping up between 70-100 pounds for the average home.

The average cost of a fixed mortgage loan is down to 4.41% compared to the 4.5% of May which marks the lowest it has been yet since the year started.  Interest attached to a five year mortgage has also dropped down from 5.6% to 5.41% according to the mortgage rates tracker group Moneyfacts.  The financial agent stated that one reason the mortgage rates have continued to drop is because of a decrease in swap rates which many of the new deals offered by the banks are based.

At the moment, most analysts are predicting that the Bank of England’s Monetary Policy Committee will not increase the base rate until Q4 of this year, but given the fact that the threat still looms many are taking advantage of the lapse and low mortgage rates to sign into fixed mortgagesInterestingly enough, even with the threat there are also many homeowners fixing their borrowing costs and fixed rate deals are increasing the competition in a time when most would predict that the housing market might suffer another fall. 

This is partially due to the fact that many lenders have dropped their interest rates on fixed mortgages to draw consumers to them including mortgage giants NatWest, Halifax, Lloyds TSB, and Nationwide.  Also aiding in the rise of fixed mortgages is the fact that there are now more mortgages available that require small deposits with 31 loans on the marketplace for those who can only put down 5% on their deposit which is an increase of seven since the start of the year and the highest number of low deposit loans seen since December of 2008.  Those who can afford 10% deposits have also seen the number of options increase from 199 up to 244.

Property experts nervous about new property investment fund proposal

[ Posted February 9th, 2011 ]

With so many first time buyers afraid to take out a mortgage due to the credit crunch and lending shortage that is leaving many in fear of getting turned down for fixed mortgages property brokers have invented a new type of investment fund that invites first time buyers to get their hands on the rungs o the ladder by paying only a 5% deposit without the need for a mortgage at all.  The group was launched by the Mill Group and offers first time buyers the chance to invest their funds into buyer deals at up to 95% of the total LTV, but industry pundits are sceptical about the idea.

The way it works is those interested in buying a home must purchase 5% of the cost of the home and then investors will put up the costs o the 95% remaining portion without involving an actual mortgage lender.  In exchange, the first time buyer will pay a monthly charge on their investment and are expected to pay out the remaining total over the next five or so years with a standard interest mortgage rate attached on the loan.  At this point if they cannot afford to buy out the remaining investment they can secure a mortgage from a lender hitched on the idea that creditors will be offering more loans down the line as the economy stabilizes.

However, Personal Touch Financial Services sales director Dev Malle comments that although the new scheme is unique, it will not offer the same type of protection that any FSA mortgage would.  He added that there is concern that terms, payments, mortgage rates, and interest will fluctuate at terms that are convenient to the investor and not the first time buyer leaving plenty of room for problems in an agreement that is not regulated by the FSA.

The obvious problems are of course what would happen if a borrower fell behind in payments and if it would simply be easier for borrowers to wait five years to purchase a home instead saving money to put forth on their own mortgage deposit without the investment risk.

 
 
 
 
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