Mortgage rates falling
A number of lenders have cut their rates over the last few weeks. In fact, it is becoming easier to get a competitive rate with a smaller deposit.
David Hollingworth at L&C is cautiously optimistic about the market: “In terms of new deals, I would say a greater stability in the market is breeding more competition. As house prices stabilize, lenders are starting to show more appetite to lend, so they’re finally starting to compete for customers.” David continued: “Up until recently, the only competition has really only been at the low-risk end of the market with a number of lenders fighting over homebuyers with large deposits or significant equity in their property, but it’s beginning to filter down and we’re seeing a greater willingness to lend up to higher LVTs. The signs are definitely encouraging. We’re obviously not back to boom times, but the mortgage market is better than it was a year ago.”
The top deals are still for those with a large deposit, but there are cuts.
If you have a deposit of 45% or more, Coventry Building Society has just launched a two-year fixed rate of 3.45% – plus fees of £999. Its two-year fix is at 3.45%, again with fees of £999.
From Saturday January 16, the market leader will be a two-year fix from Principality, which is offering rates of 3.44% for loans of up to 65% with fees of £999.
It’s not only fixed rates that are coming down. Some lenders have also cut their tracker rates. If you are happy to take a bit more risk and opt for a variable rate mortgage, you can benefit from some even lower rates.
For example, HSBC is reducing its tracker rate from 2.59% to 2.49%, again for those with a 40% deposit and fees for £999.