Borrowers' rates are set to climb, so make the most of today's deals
Offers are unlikely to improve, so now is the time to secure a new mortgage
Sunday 20 November 2011
The only thing we can be certain of right now is that we have an uncertain financial future. But with the eurozone crisis and concerns that we could face a second credit crunch, do homeowners need to act now before it is too late?
Many aspects of the property and mortgage market have been encouraging in recent months, with Barclays relaunching into 90 per cent mortgages and Nationwide improving its availability of high loan to value (LTV) loans. "The story over the summer was one of improving mortgage rates and more competition in the market that was providing more opportunity for borrowers to make savings," says David Hollingworth from mortgage brokers London & Country.
Landlords have been rubbing their hands with glee over rising rents and lenders have been getting on board. The volume of buy-to-let mortgages has jumped by 16 per cent in the last quarter, according to the latest figures from the Council of Mortgage Lenders (CML), totalling 34,500 in the three months to September and marking its highest level in three years. Nottingham Building Society currently offers a deal at 4.19 per cent, albeit with a hefty £1,299 fee, fixed until February 2014 for borrowers with a 25 per cent deposit. In one recent move in the buy-to-let market, Woolwich improved the maximum LTV it would offer to wannabe landlords to 75 per cent.
However, Mr Hollingworth says the trend for ever cheaper mortgage rates is one that is on the turn, and points to rate changes this week from Nationwide, Woolwich/Barclays, Skipton and ING. Although lenders have been seemingly more competitive, he reminds homeowners that the amount of lending in the market has not increased and could fall back a little depending on how the eurozone pans out.
"The continued problems in the eurozone have resulted in an increase in funding costs for lenders and that is feeding through to the mortgage products in the UK," says Mr Hollingworth. "Some may have come down a little but these tend to be the exception to prove the rule."
New CML statistics also show that the number of loans dipped in September. There were 48,200 loans taken out for house purchase in September (worth £7.1bn), down 2 per cent on August, although up 3 per cent compared with September 2010. For remortgaging, there were 34,200 (worth £4.3bn), representing a 1 per cent decline the month before, but a 25 per cent uplift on a year ago.
For anyone wanting to remortgage now, the experts say that this could be the ideal time to switch to a fix. Fixed-rate mortgages offer protection against future rises in interest rates; anyone looking for security should act now.
"Several lenders have increased their rates in recent days, often with little or no notice at all, and I expect this to continue," says Andrew Montlake from mortgage brokers Coreco. "With this in mind it seems that we have now passed the lowest point in the current interest rate cycle and it does seem sensible to look at locking into a rate now."
He argues that even if the situation begins to settle and more competition returns to the market, it is still highly unlikely that rates will come back down below the current levels.
"The potential upside of rates getting lower is a small one, while the downside of rates getting ever more expensive once more is much larger and there are many, who feel they have ridden their luck long enough," says Mr Montlake.
Even with no indication that we will see an upward movement in base rate soon, fixed rates still look appealing. Top deals include the 2.89 per cent fix (until November 2014) from Yorkshire BS at 75 per cent LTV with a £495 fee and for first time buyers (FTBs). Skipton is offering a 95 per cent LTV deal costing 5.99 per cent until January 2014 with a £195 fee, and HSBC has a fee-free 4.89 per cent loan at 90 per cent LTV, fixed until January 2017.
Helen Adams from FirstRung Now.com has concerns about the future for new homeowners. Deposit demands are still a huge hurdle but this week first timers may have had some good news in the shape of Clydesdale and Yorkshire offering attractively priced mortgages with as little as 5 per cent deposit, at a rate of 5.49 per cent fixed for three years, with a fee of just £599 (although this rises steeply to 6.12 per cent for 95 per cent LTV loans). However, Ms Adams predicts that things could soon turn sour.
"I foresee more hesitancy from lenders towards FTBs," she says. "The trend for parental help will continue. My advice: keep your head down, tighten your belt and save. You never know what's round the corner."
David Hollingworth, London & Country
"The bottom line for borrowers at the moment is that they could see rates continue to rise, so if they are considering a switch it would make sense to make a move sooner rather than later. As funding becomes scarce and costs rise, it is inevitable that the current upward trend in mortgage rates will continue."
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
auctionThe first 23 lots have now gone. But there are 22 more still up for grabs
healthJames Bond's alcohol consumption puts him at 'high risk' of cirrhosis, tremors... and impotence
musicPolice chief rejects rappers' claims that his work is as dangerous as law enforcement or military service
comedy'Fresh Meat' star sees off stiff competition from Alan Carr, David Mitchell, Graham Norton, Lee Mack and Sarah Millican to win top prize
tvSpoiler alert: Find out the result of a heated final show
Beatles rush out 'bootleg' album to defy EU copyright law
Harvey Weinstein reveals his secret weapon on-set
Now that an oil trader's drinking has got him sacked, will we all have to make do with an afternoon latte?
Chiwetel Ejiofor and Idris Elba get nods for Best Actor, which no black Brit has ever won
Geoffrey Macnab reviews The Desolation of Smaug - the meat in Peter Jackson's Hobbit sandwich
peopleWhat advice would David Cameron give to his younger self?
- 1 French café starts charging extra to rude customers
- 2 Sun will 'flip upside down' within weeks, says Nasa
- 3 Australia incest case: Severely deformed children found in remote farming community after generations of inbreeding
- 4 Physicists discover 'clearest evidence yet' that the Universe is a hologram
- 5 Fox News presenter tells viewers it is a 'fact' that both Jesus and Santa Claus are white
- < Previous
- Next >
iJobs Money & Business
£30000 - £45000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Pre-Sales / Cl...
£40000 - £60000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£40000 per annum: Harrington Starr: Senior Network Engineer (CCNP, CCIE, Netwo...
Day In a Page
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.
John Lennon's childhood home in Liverpool to be sold at auction. Guide price: £150,000-£250,000.
A six-bedroom detached period property with secluded gardens, ample parking and a double garage in Rye, £675,000.
A large split-level property with three double-bedrooms and roof terrace, close to Crouch End Broadway, £625,000.
A charming barn conversion in the picturesque Cotswold village of Ilmington with three bedrooms, a detached garage, workshop and beautifully manicured gardens £675,000.