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Nationwide slices mortgage rates

[ Posted May 18th, 2012 ]

Although the warning from the Bank of England this week may have seemed to come at a bleak time when many homeowners are already struggling to meet their monthly mortgage payments, in some ways it could not have come at a better time.  This is due to the fact that the Bank of England is warning homeowners to take on fixed mortgages to protect themselves from the damage of the eurozone crisis and increased SVRs, and Nationwide has just released a new set of mortgage deals to the market after slashing their interest rates by a full .1%.

Nationwide has announced some of the best mortgage rates on the market by announcing the slash that now offers borrowers three new types of fixed mortgage deals that have all had their interest rate slashed by the .1%.  Each of these loans comes with a LTV that can be valued as high as 70% for those who may not have a large deposit or a large amount of equity in their home.  Plus, for new homeowners that are taking part in the governmental NewBuy Scheme it is even possible to get a LTV as high as 95% set for five years at only 5.99% which is a pretty good deal for a long term mortgage product.

The application fees attached with the new fixed mortgages are also all fairly reasonable which may be contributed to the fact that Nationwide is supporting the NewBuy Scheme launched by the government heavily in an intent to help first time home buyers get in on the market.  The bank has reduced their products fees by almost half since the start of the month allowing for some great deals all around on mortgage products for those who act now.

First time buyers can receive a mortgage after paying an application fee of only £200 while those who are remortgaging their homes or are moving can look at an application fee that is still set low at £450.  All of the home loans also come with an attached £99 booking fee but there is no completion fee making the rates competitively low when you factor in associated fees that other banks may offer.  Tracie Pearce of the banking institute stating that while other lenders are increasing rates, Nationwide is proud to remain competitive by reducing theirs and offering good news to customers instead.

Bank of England warns of increasing mortgage rates

[ Posted May 16th, 2012 ]

Despite the fact that the base rate is still low at this moment, the Bank of England put out a warning this week to consumers warning them that mortgage rates are going to increase sharply soon and any mortgage holder that is signed into a variable rate may want to rethink their current deal and switch to a fixed rate product.  The warning could affect as many as 11.2m mortgage holders across the UK, and was issued because of the eurozone crisis which is continuing to increase borrowing costs for banks.

Experts are alarmed at the situation because the banks are not going to foot the higher charges of borrowing for long, and will instead push up their variable rates so that they can ‘restore’ profit margins.  An increase in mortgage rates will most likely be felt by those who are on SVRs or tracker loan and could mean as much as a few thousand pounds more each year for mortgage payments.  The result of course is that some homeowners will not be able to find money in the budget and end up in foreclosure.

According to the Bank of England, the eurozone crisis has already affected some households leaving them to struggle to find more money to make their payments.  The economy is not situated in a good place to help as the double dip recession is being carefully walked around as politicians and policy makers attempt to try to keep the UK out of the chaos in Europe but are still finding the country affected.  With the increase in funding costs the high street banks are increasing their SVR loan rates leaving only those with fixed mortgages safe for the moment.

The warning from the Bank stated that it is likely that as funding costs continue to remain high banks are going to look for ways to compensate which unfortunately means for homeowners an increase in mortgage rates.  Those with the Co-Op, Halifax, and Yorkshire Bank have already felt this impact slightly as the three major lending banks have all increased their SVRs interest rate this month.  More banks are expected to follow suit over the coming summer months which is why it is important for those who do not want to be hit unexpectedly with higher mortgage rates to sign into a fixed product.

How to escape increasing mortgage rates

[ Posted May 12th, 2012 ]

Many homeowners took the increase in mortgage rates by the major banks last week in their stride or at least in a low key fashion since they considered themselves helpless in the situation.  While it is true that those on an SVR with one of the major banks such as Halifax and the RSB had the right to increase mortgage rates with or without customer approval, there are choices that you can make as a mortgage holder to get out from underneath the rate hikes.

If you have sufficient credit there is actually no reason that you should pay more simply because the bank demands you too. Those do not have a mortgage with one of the banks that just increase their rates should not get too smug, because unless you have one of the many fixed mortgages products, you may be next.

In fact, anyone with a SVR may be next as many other banks and building societies plan to follow suit next including big lending agents Co-op and Yorkshire Bank.  In fact, experts predict that by the end of the year most people on SVRs will see their rates increase back up.

While an increase of .5% likely is not going to seem like much at first glance, it certainly is not going to result in one of the best mortgage rates, and it is going to do more damage to a household budget then it will seem too at first.

This is due to the fact that the average homeowner is going to see about £40-£50 added to their mortgage payment each month, and by the end of the year that will add up to additional costs of about £480- £600.  At this point it is easier to see how the slight increase can really start to stretch a budget.

The good news is that homeowners that have at least 15% equity in their home do have another choice: to shop around for another mortgage product.  While you will to be careful about termination fees and new product fees, if you are diligent in your efforts to find a new deal it is possible to get locked into a lower rate fixed product.

Bear in mind that even if the fixed product is a bit higher than you are paying now, it will protect you against future SVR hikes and if the mortgage market remains unstable it is likely that these are coming in the future.

 
 
 
 
mortgagerates123.co.uk aims to provide every client with cheap, affordable and best mortgage loans in the UK market, however the actual mortgage rate available will depend on client's financial circumstances and credit history. Although, mortgagerates123.co.uk has made every effort to ensure that the mortgage rates listed are correct, it bears no responsibility in case of an error. 
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