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Should you change your mortgage?

[ Posted October 29th, 2011 ]

With tracker mortgages looking more appealing than ever due to the fact that the overall mortgage rates are remaining low despite small shifts in the economy and the Eurozone crisis many people are wondering if there is actually any benefit to rushing down the bank and dealing with the hassle or switching products.  However, while it may seem as if now is the time to stick to a tracker, there are still millions of home owners who have raced to take advantage of the low bank rate which means there must be something to leaving loans at the standard variable rate.

Before the credit crisis hit back in 2007 it was almost never a great deal to stick to the standard variable rate offered by a bank as it almost always was more expensive than tracker deals and fixed mortgages. However, ever since the bank rate was slashed down to just .5% in March of 2009 by Sir Mervyn King and the rest of the Monetary Policy Committee the reverse actually became true with those who borrowed funds on the SVR actually making out for a nice change.  In fact, most SVR borrowers are paying about £2,600 less every year that those that were still in a fixed or tracker deal.

However, at the moment fixed mortgages and tracker rates are also at the lowest levels that have been seen on the mortgage market over the last twenty years as well making them tempting to buyers as well.  In fact, savvy borrowers should heavily consider choosing one of these deals before the Bank of England raises the interest rate to continue their savings for the next several years since once this happens the SVR rates are not going to be as attractive as they are right now.

According to figures from the Council of Mortgage Lenders published this year, about 1.8 million mortgage holders have chosen to let their fixed rate deals run out option instead to stay on the standard variable rate offered by their lenders.  Experts are now predicting that by 2013 the bank rate will increase so for those it may be profitable to hang onto the SVR for another year and then make the switch in order to secure the best deal.  However, there is a risk as the base rate could increase at any time so borrowers need to judge what type of risk they are willing to take.

First Direct slashes their mortgage rates

[ Posted October 29th, 2011 ]

At a time when many private lenders are choosing to increase their mortgage rates due to the impending eurozone debt crisis or simply because there are signs that the economy is starting to recover some lending agents are still slashing their prices in an attempt to get consumers back into their doors.  One of those banking institutes is First Direct which announced this week that they have slashed their rates on about a third of all of their mortgage products to make their offerings look more competitive in the very tight mortgage market that exists today.

One of the main things that First Direct did that raised a great deal of favorable attention from website comparison sites is their choice to reduce the rate on all of their five year fixed mortgages that come with an attached 85% dropping it down to 4.49% which is competitive for the length of the term and the lower LTV that is almost unheard of on mortgage market anymore.  This drop also helped land the lending company on many of the best buy tables published this weekend for those considering a remortgage or a new mortgage product altogether.

Also on the table for those that can afford a high desposit is the astoundingly low LTV two year fixed offset tracker deal that comes attached to a very high LTV of 65% but offers the best mortgage rates of just 1.58% with an attached arrangement fee of £1499.  While it is not likely that many people are going to be able to match that LTV, for those that have the equity in their property to remortgage or those that simply have somewhere to get the funds needed for the mortgage this is a very great deal.

Of course, there are two more deals on the market that cover more budgets as well such as the limited two year fixed mortgage product that comes with a more reasonable LTV of 85% and a mortgage rate set at 2.99%.  The advantage of this particular loan outside of the lower LTV is the fact that with a great credit score there are no fees attached which helps make the overall savings a bit more and the entire deal more tempting for those that are looking for a short term mortgage deal to secure a new home or lending principle.

Co-Operative Bank offers new fixed mortgages

[ Posted October 22nd, 2011 ]

This week the Co-Operative Bank announced that they will become more competitive as a major player in the long term fixed mortgage market by offering new five year deals with the best mortgage rates attached to them for all current account holders of the banking institute.

The response is fitting with the Housing Minister Grant Schapps suggestion to banks this week that they offer more long term mortgage offerings to customers in order to entice those who want security back into the housing market.  However, only those who are already members of the Co-Operative Bank can actually take advantage of this deal, although those willing to sign up to be a member can also get in on the low rates.

Those that can afford a 25% deposit on a new home can take advantage of the low fixed mortgages that are set for five years at the rate of 3.39% and those that need a bit more leeway and can afford a 15% deposit can also take advantage of the deal with an attached mortgage rate of 4.24%.  Attached to the deal is an application fee that is set at £999 which should also be figured into the overall savings of the offer.

Head of mortgages for the Co-Operative Bank James Hillon stated that as living costs continue to rise every month most homeowners are looking for some security when they sign into a fixed rate mortgage product and the five year term product aims to deliver just this.

Many other lenders are also slashing their five year deals, including the Yorkshire Building Society, which has a very similar offer set at 3.39% for those who can afford a 75% LTV and the application fee of £995.  The top rate for a five year product that is on the market hails from the Chelsea Building Society, and lies at the slightly lower rate of 3.29%.

For those that cannot afford the 75% LTV, the lowest option is an 85% LTV option that is being offered from Leeds Building Society with a mortgage rate of 4.19% attached to it and a £999 application fee which places it directly in line with the Co-Operative Bank offer.  Consumers that are considering purchasing a home may want to look into these deals as this week a number of lenders increased their rates and over the next few weeks more are expected to follow suit.

 
 
 
 
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