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Price war erupts in the UK Mortgage Market
The big UK mortgage lenders have cut their rates - fantastic news for consumers. It is even possible to pick up a mortgage below 5% for two years, but make sure you check the fees first. There is a new incentive for those who will be remortgaging, as opposed to first-time buyers, when their current mortgage arrangement finishes. As the market leaders have started to cut their rates the fixed rate mortgage has generated more interest as the gap between these rates and the standard variable rate (the rate that a customer reverts to once their fixed rate deal finishes –and is usually the highest rate a lender has) has grown.
As lenders reigned in their lending when the credit crunch bit the fixed rates available on the market crept up while the standard variable rates (SVR) remained about the same as the Bank of England base rate was kept at the same level for several months. Now as the fixed rate mortgage offer rates are much lower than the SVR’s it is worth searching for a remortgage deal. For those who have large deposits or those with a good amount of equity in their property which will be a great number of people, now is definitely a good time to explore the fixed rate mortgages on offer and are likely to find a decent rate fixed for two or three years. Using a mortgage broker who will search the whole market will ensure you are getting the best deal, possible one of the following offers. As we mentioned at the beginning the fees associated with taking on a new mortgage are high, arrangement fees have risen 20% in the last year. Cheltenham & Gloucester’s two-year fixed rate is 5.65% but comes with a whopping £2,094 fee. Despite the large fee the rate is much lower than was on offer two months ago. C&G also offer a 5.75% rate with a lower fee of £1,094. The lender with the biggest market share, Abbey, has also cut their rate. They are offering a two year fixed rate of 5.89% with a fee of £995 for those who have at least 30% equity in their home or 5.99% with the same fee for those with 25% equity. These much improved rates offered by two of the big lenders as well as Halifax, Woolwich and Nationwide will be welcome news to consumers. The major lenders have certainly started the ball rolling and the smaller lenders are started to follow as they have little choice in order to remain competitive. Yorkshire Building society has a couple of interesting offers, a very attractive 5.54% loan and a fee of £895 for those with 25% equity or a deposit and a very enticing rate of 4.89% fixed for two years however comes with a fee of 2.5% of the loan amount. Those with lower mortgages can certainly benefit from this mortgage deal. The mortgage market is certainly heating up again and with more lenders offering more and better rates many looking to remortgage can save hundreds or maybe thousands of pounds by changing mortgage lender when their existing deal comes to an end. |
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This intel was contributed by Aaron Hill
Aaron Hill
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May, 2012
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