Lenders are busy undercutting each other on record low mortgage deals. Brokers are battling it out for a place at the top of the best buy tables, edging ever closer to two-year fixed deals below 1%. Despite these very attractive headline rates, it is vital that borrowers are prepared for the in-depth ‘criteria’ checks that Lenders now employ. Affordability, and the income you have to pay the mortgage, is still the Lenders top priority.
Mark Boyce commented “Having a big deposit isn’t everything when it comes to getting the best deals. Restrictions are virtually the same as for first time buyers. Low credit scores, unsecured debts, student loans, pension restrictions, school fees and childcare costs are causing problems for homeowners. The message here is to really check your credit score, get your ‘house in order’ financially and be prepared to carry out some months of window dressing and preparation (eg. paying off unsecured debts, showing financial responsibility etc). Having said that, when you are organised and ready to apply, there are some very exciting rates out there.”
The next six months could prove the best time in history to take out a mortgage, according to some experts. Fixed-rate deals have never been cheaper and variable rates have almost halved over the past twelve months.
Bank of England data shows that a typical two-year fix has dropped from 2.37% to 2.01% over the past twelve months. On a £200,000 loan, with a 25% deposit, that would save £420.00 a year. The average variable rate has plunged from 2.74% to 1.64%, chopping £1,300.00 off annual repayments.
The arrival of new challenger banks entering the mortgage market has also increased competition, driving down rates further. Experts suggest two-year fixed rates could fall below 1% while five year mortgages could go below 2%.
One of the reasons banks are able to offer mortgages at such low rates at the moment is because they have reserves of cash to loan out from the ‘Funding for Lending Scheme’.
So never a better time to investigate the deal that you might be able to secure. Do contact us and we will be able to introduce you to an Independent Financial Broker who will guide you through the process.
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