Posts with tag: mortgage rates

Average fixed-rate mortgage deals drop by 17%

Published On: June 10, 2015 at 3:37 pm

Author:

Categories: Finance News

Tags: ,,

Research from the Nottingham Building Society has revealed that the average fee on a typical fixed rate mortgage has fallen by up to 17% in the last six months.

Reduction

Analysis from the report shows that the average fees are now £711 and as a result have fallen £149 from November 2014, when they stood at £860. On the other hand, buyers choosing variable rate mortgages have not benefited as much, with average fees at £719, in comparison to £727 six months ago.[1]

It was also revealed that between November 2011 and 2014, average fees for best buy fixed rate and variable rate mortgages increased by 20% and 10% respectively.[1]

Mortgage brokers suggest that fees may rise substantially over the next two years, according to further data from the report. 30% believe that fees will increase during this period, with just 12% predicting further falls. Pressure on rates and decreased competition among lenders have led 23% of brokers to suggest rates will increase in the next six months.[1]

Average fixed-rate mortgage deals drop by 17%

Average fixed-rate mortgage deals drop by 17%

Shop around

Ian Gibbons, Nottingham Mortgage Services Senior Mortgage Broking Manager, said that, ‘whatever happens to mortgage rates and fees, there are so many products to choose from if you shop around and receive the right advice, you can still find a really competitive deal that meets your specific needs.[1]

He went on to say that, ‘our research shows that there are now 4,139 residential mortgages on the market, compared to 4,020 in November last year, and 3,027 in November 2011. So, in just over three years the number of residential mortgages on the market has increased by around 37%.’[1]

Concluding, Mr Gibbons said, ‘In order to grab the headlines with a market leading low rate, sometimes lenders will charge a higher fee to offset the lower margins they make on the rate, whereas some lenders will charge lower, or even no fees, but offer a slightly higher rate.’[1]

‘Depending on your requirements, either scenario may be the best option for you, but it’s important to seek professional advice where your adviser will be able to carry out a true cost analysis over the term of the preferential rate or term of the mortgage to establish the best course of action.’[1]

 

[1] http://www.propertyreporter.co.uk/finance/17-dr0p-in-average-fix-rate-mortgage-fee.html

 

BTL rates down by 0.30% at Aldermore

Published On: June 10, 2015 at 9:15 am

Author:

Categories: Landlord News

Tags: ,,

Aldermore has made the latest move in the mortgage market by announcing that is to reduce some of its BTL 2-year fixed rate mortgages by up to 0.30%.

Deals

Two-year fixed rate mortgage deals with the firm, which have a 2.5% completion fee, now begin from 4.18% for 70% and 75% LTV mortgages. For 80% LTV’s, rates now start from 4.68%, down from 4.78%, again with a 2.5% completion fee.[1]

Additionally, two-year fixed rate mortgages with a £1,999 completion fee have now been reduced down from 4.98% to 4.68% for both 70% and 75% LTV’s. [1]

BTL rates down by 0.30% at Aldermore

BTL rates down by 0.30% at Aldermore

Thriving

Charles Haresnape, Managing Director of Mortgages and Commercial Lending Aldermore, feels that, ‘buy to let is a thriving sector of the housing market.’ He stated that, ‘we have made these changes to keep pace with demand and ensure our products are attractive to our customers in this very competitive market.’[1]

‘Aldermore has developed clear expertise in the buy to let market due to our commitment to support a wide range of customer needs, from the simple to complex,’ Haresnape remarked. He went on to say that, ‘these changes further highlight our commitment to the buy to let market, which we believe will continue to flourish in the post-election and pension freedoms.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-fixes-cut-by-up-to-030-at-aldermore.html

 

 

The Best First Time Buyer Mortgages

Published On: June 3, 2015 at 4:13 pm

Author:

Categories: Finance News

Tags: ,,,

The amount of low deposit mortgage deals has reached the highest level for three years, helping struggling first time buyers onto the property ladder.

Read more about how many are available here: /mortgage-rates-for-first-time-buyers-are-at-a-three-year-low/.

But prospective buyers should remember to look at the fees as well as the rates, as low rates often come with high fees. Compare the whole cost of the loan.

Take a look at the best rates:

5% deposit

Two years 

Chelsea Building Society has the lowest rate for a 5% deposit, at 3.99% with a large £1,675 fee.

A 25-year £150,000 mortgage would cost £790 a month and £20,657 over the two years.

You could save money using Post Office Money’s Help to Buy mortgage. This deal is fee-free at 4.29%. On the same mortgage, monthly repayments would be slightly higher at £815, but over two years you would pay less, at £19,583.

Five years

Chelsea Building Society has a longer-term low deposit mortgage with a 4.69% rate and £1,675 fee.

The same mortgage would cost £850 a month and £52,675 over the five years.

But a slightly higher rate could save you money, due to lower fees.

The Best First Time Buyer Mortgages

The Best First Time Buyer Mortgages

Look at the HSBC’s Help to Buy five-year fix of 4.89% with a £199 fee. The same mortgage would cost £867 per month and £52,236 overall.

10% deposit

Two years

Post Office Money has a two-year fix at 2.59% with a £1,495 fee. This is the lowest rate for a 10% deposit.

A 25-year £150,000 mortgage on this rate would cost £679 a month and £17,808 over the term.

But if you pay a slightly higher rate you could save on a lower fee.

Yorkshire Building Society has a 2.64% rate with a £975 fee. The same mortgage would cost £683 per month, but is £428 cheaper overall than Post Office Money’s offer, at £17,380.

Five years 

Post Office Money has a 3.69% rate with a £1,495 fee. The same mortgage costs £766 a month and £47,473 over the five-year term.

Leek United offers a 3.59% deal with a £999 fee. The mortgage would cost £758 a month and £46,490 over five years.

15% deposit

Two years

Post Office Money has a 1.99% rate with a fee of £1,495. The same mortgage costs £635 a month and £16,736 over the two years.

However, Yorkshire Building Society has a 2.04% rate on offer with a £975 fee. This mortgage would cost £638 per month and £16,303 over the term, £433 cheaper than Post Office Money.

Five years

The lowest five-year deal for a 15% deposit is from Chelsea Building Society, which offers a 3.14% rate for a £1,675 fee.

A 25-year £150,000 mortgage would cost £722 per month and £45,012 over five years.

The same rate is found at Leeds United, but for a £999 fee. This would make this mortgage £2,001 cheaper than Chelsea’s.

20% deposit

Two years

If you can raise a 20% deposit, rates will drop below 2%.

Newcastle Building Society has a competitive rate of 1.65% with a £1,299 fee. The same mortgage would cost £610 per month and £15,951 over the two-year period.

Five years

Leeds Building Society offers a 2.64% rate with a £1,999 fee. The same mortgage costs £683 a month and £43,011 overall.

Nottingham Building Society has a 2.65% rate with a £1,499 fee. A slightly higher rate but lower fee puts the repayments at £684 a month but a lower five-year cost of £42,557, saving £454.

 

 

 

Mortgage approvals rise at largest rate for 6 years

Published On: June 3, 2015 at 3:55 pm

Author:

Categories: Landlord News

Tags: ,,

The latest Bank of England Money and Credit Report has given encouragement to the property market.

According to the report findings, approvals for mortgage rose in April to their largest amount since 2009. In total, 68,076 house purchases mortgages were rubber-stamped last month, an increase of 9.89% from March and the highest rise since February six years ago.[1]

Confidence

These results are sure to buoy the mortgage market as they suggest that confidence appears to be growing, one year after the implementation of the Mortgage Market Review. All types of mortgage approvals during April were substantially above average for the last six months.

Head of lending at the Mortgage Advice Bureau, Brian Murphy, said that, ‘remortgage approvals have risen at twice the rate of house purchase approvals over the past year, despite tougher affordability checks which some feared would imprison consumers in their existing deals.’ He went on to say that, ‘falling mortgage rates have boosted demand in the remortgage sector and there are significant savings to be had for borrowers moving away from their lender’s standard variable rate.’[1]

Mortgage approvals rise at largest rate for 6 years

Mortgage approvals rise at largest rate for 6 years

Positive

Mr Murphy also said that, ‘with the election clearly having little impact on mortgage activity, the outlook for the rest of 2015 remains positive. Lenders have a healthy appetite for business and affordability conditions are being helped by the low rate environment.’[1]

He warns however that, ‘today’s rock-bottom prices can’t last forever and it is likely we’ll see greater levels of mortgage activity as borrowers seek to lock into a preferable rate while they still can.’[1]

[1] http://mortgageadvicebureau.com/news/Mortgageapprovalsjumpbyhighestamountinsixyears/1028/

 

Tumbling mortgage rates saving lenders thousands

Published On: June 2, 2015 at 3:02 pm

Author:

Categories: Finance News

Tags: ,,

Tumbling mortgage rates are saving homeowners hundreds of pounds a year, according to new figures from the Bank of England.

Borrowing winners

The ongoing ‘mortgage war,’ which has seen rates cut to record low levels, are leading borrowers to be better off in the pocket, with the costs of homes loans continuing to drop. Experts are predicting further cuts as the contest between rival lenders goes on.

The Bank of England figures show that, for the first time in history, the average five-year fixed mortgage rate is now below 3%. What’s more, the average two-year fixed rate has gone below 2% for borrowers with at least a 25% deposit. Taking an average £200,000 mortgage, the large reduction in rates now means that yearly payments can now climb up to £1,400 less than one year ago.[1]

Official data indicates that the average two-year fixed rate for a consumer with 25% deposit during April was 1.95%, down from 2.54 in the same period last year. For a £200,000 mortgage over 25 years, this leads to an annual saving of £700. Taking five-year fixed rates with the same deposit into account, rates fell from 3.69% in April 2014 to 2.93% this year, saving £967 off yearly mortgage payments.[2]

However, it is not just the fixed rate mortgage rates that have fallen considerably. Two-year variable rates have nearly halved in the last year, falling from 2.73% to 1.55%. On a typical £200,000 mortgage, this would reduce yearly rates by nearly £1,400.[3]

Tumbling mortgage rates saving lenders thousands

Tumbling mortgage rates saving lenders thousands

Lack of foresight

Speaking to the Daily Mail, mortgage expert Brian Murphy said that, ‘two years ago, brokers could not have predicted rates as low as these-and it is feasible that rates will continue to fall in the short to medium term. Lenders are keen to do business and there is a lot of competition out there. Banks and building societies are willing to sacrifice a bit of profit to offer the best rates and wrestle business off one another.’[4]

Rates are likely to stay low for the foreseeable future. In addition, slow wage growth and low inflation indicate that a rise in lending costs is unlikely until at least next Spring.

Mortgage broker David Hollingsworth commented that, ‘these record low mortgage rates underline just how good the mortgage options for borrowers have become, with rates plummeting even in the last 12 months. Fixed rates in particular have hit rock bottom offering borrowers the chance to lock their rate in at unprecedented lows.’[5]

 

[1] http://www.whathouse.com/news/article/555b6a804031b9515e8df278/How+falling+mortgage+rates+are+saving+borrowers+thousands+of+pounds

 

 

Mortgage Rates for First Time Buyers are at a Three-Year Low

Published On: June 2, 2015 at 9:07 am

Author:

Categories: Landlord News

Tags: ,,,

Mortgage rates for first time buyers are at a three-year low, revealed research from MoneySuperMarket.

The comparison website found that that number of mortgage products for first time buyers is currently 2,776. This is partly due to the Government’s Help to Buy scheme, which has seen the amount double since April 2012, when the number was 1,324.

Furthermore, the average rate on a first time buyer mortgage has fallen by one percentage point in the last three years, to 3.26%.

Mortgage Rates for First Time Buyers are at a Three-Year Low

Mortgage Rates for First Time Buyers are at a Three-Year Low

The average loan-to-value (LTV) required for first time buyers has been stable since April 2012, 79% compared to 78%. This would require a high deposit of £31,500 on a £150,000 home.

However, a 5% deposit on the same property would be £7,500. And this is increasingly available to first time buyers, thanks to the amount of 95% LTV mortgages, which has grown recently.

There are currently 170 mortgage deals on the market at this LTV, as Help to Buy thrives. Since 2012, there has been a 448% rise in this type of mortgage, from 31 products three years ago. Additionally, the average rate on these deals has fallen by 1.04 percentage points, to 4.72%.

Head of Banking at MoneySuperMarket, Kevin Mountford, says: “The increase in the number of first time buyer mortgages, and the corresponding fall in interest rates, can only mean good news for those looking to get a foot on the ladder.

“Even better, borrowers who can scrape together a 10% or even 15% deposit will find they are able to get their hands on more competitive deals.

“The introduction of the Government’s Help to Buy ISA, which will see the Government provide up to £3,000 towards a first time buyer’s deposit, could also help prospective homeowners get themselves into a new LTV bracket, thus helping them secure a more competitive deal.”

Mountford continues: “For anyone looking to buy their first home, it’s important not to be led by interest rates alone when comparing mortgages. Expensive fees can wipe out the potential benefit of a lower rate, so it’s worth doing the sums first to ensure you really are getting a great deal.

“Whilst mortgage approvals were up 7% overall on March, this doesn’t mean that lenders’ criteria is becoming more relaxed. After the introduction of the Mortgage Market Review, borrowers not only need to have a strong credit score, they also need to prove that they can afford the mortgage they’re applying for – not only at its current rate, but if rates should rise in the future.”

He concludes: “Finally, also think about whether you want a fixed or variable rate deal. Fixed provides security that your rate won’t change during the term of the deal. Whilst variable rates tend to be cheaper, you need to ensure that you will be able to afford your monthly repayments if and when interest rates do rise.”1 

1 http://www.propertyreporter.co.uk/finance/ftbs-have-never-had-it-so-good.html