Lenders cut fixed rate mortgage rates

According to industry reports a number of lenders have slashed the rates on their fixed rate mortgage offerings even though the Bank of England decided to keep the base interest rate on hold again this month at its record low of 0.5 percent. A number of building societies and banks have cut the rates on their fixed rate deals.

High Street banking giant HSBC recently launched its lowest ever five year fixed rate deal, and last week saw Coventry Building Society and Nationwide Building Society reduce their fixed rate deals. One industry expert said that the reason why lenders were slashing their fixed rates even though the base rate had remained static was because they wanted to try and entice people off going for low standard variable rates. With banks already struggling the situation is being made worse by people opting for low standard variable rates, and this has led the banks to start taking action.

She said that many people that had come off special fixed rate deals had then moved onto standard variable rates, and with the base rate being so low this had been their cheapest option. This has resulted in lenders struggling, and many are now working on the hope that by cutting their fixed rate deals they can tempt people into remortgaging and taking out a fixed rate deal rather than a standard variable rate one.

Financial expert Michelle Slade stated: ‘Millions of customers who have come off short-term fixed-rate and tracker deals in recent years have gone on to their lender’s standard variable rate as it has been cheaper than fixing again. For example, Nationwide’s base mortgage rate is just 2.5%.’ She added: ‘The new fixed rates are certainly mouth-watering and could be worth grabbing for some borrowers.’

Tags: interest, fixed rate mortgage, variable rate mortgage, mortgage, interest rates

Long term fixed rate mortgage option from Yorkshire Building Society

With the base interest rate in the UK still at its lowest level in the history of the Bank of England, at just 0.5 percent, many are now wondering when the base rate will start to increase again, and this is causing many people to wonder whether they should fix their rate over a period of time when taking out a mortgage.

There are different options available for those that want to fix their mortgages, and whilst the choice is not as great as it was prior to the financial crisis more and more lenders are becoming more lenient when it comes to offering a good choice of mortgages, although these are often to those that have a higher deposit level.

It has now been announced that the Yorkshire Building Society is offering a long terms fixed rate mortgage, with those considering buying a home or remortgaging now able to benefit from a ten year fixed rate mortgage. The deposit required on the mortgage is 25 percent, and borrowers will benefit from a rate of 4.99 percent.

The mortgage also has an arrangement fee that borrowers will have to pay, and this comes to £995. Whilst a ten year fix will provide many people with increased stability and peace of mind there are also some that may feel that this is too long a period to fix for.

An official from the building society said: “This product presents a fantastic opportunity for borrowers looking for long-term value, protection from future interest rate rises and piece of mind when it comes to their mortgage payments. Over the last ten years the average mortgage standard variable rate across the market has been 6.2%* so our new range of ten-year products offer great value.”

Tags: fixed rate mortgage, mortgage, finance, Mortgage loan, Yorkshire Building Society

Should you Remortgage at a Lower Rate of Interest?

Lenders are offering sweet deals to homeowners who wish to remortgage their homes. HSBC is currently offering two-year fixed rate remortgage loans at the low rate of 2.69% and Nationwide has announced lower interest rates for those who can make a small deposit on the remortgage loan. Read more

Tags: loan, five-year fixed rate, remortgage, fixed rate mortgage, bank, fixed terms, homeowners

Woolwich launched cheapest mortgage since first loan

According to recent reports the Woolwich recently launched its cheapest mortgage deal since its first loan, which was made around one hundred and sixty years ago. Read more

Tags: mortgage, confidence, cheap mortgages, woolwich, bank of england

Natwest cuts mortgage rates

RBS has announced it will cut mortgage rates and introduce a new savings product in a bid to help borrowers and encourage first-time buyers to save for a deposit. Read more

Tags: Mortgages, Business Finance, new savings product, mortgage rates, paul geddes, natwest mortgages, consumer banking, fixed rate mortgage

Fixed-rate mortgages proving popular

Despite predictions that interest rates will likely fall again in 2008, fixed-rate mortgages are continuing to grow more popular, new research suggests.

Data from Abbey reveals that 35 per cent of homeowners would choose a fixed-rate loan if they were re-mortgaging tomorrow, which is an increase from February’s figure of 31 per cent.

Nici Audhlam-Gardiner, director of Abbey Mortgages, said that the findings suggest that “the appetite for fixed-rate mortgages remains high”.

“We expect that economic uncertainty is contributing to this trend, as people try to take control over their outgoings,” she commented.

The survey also found that five-year fixed-rate deals were the most attractive to homeowners looking for a new mortgage, follwed by two and three-year deals.

Meanwhile, the Charcol Mortgage Monitor also recently revealed an increase in the uptake of fixed-rate mortgages, with 52 per cent of all borrowers choosing this option in February.

Tags: survey, fixed rate mortgages, Charcol, rate deals, fixed rate mortgage, February, mortgage

Brits want fixed-rate mortgages according to research

Over half of British consumers would choose a fixed-rate mortgage if given the choice, reveals new research.

Findings from the Fairinvestment.co.uk shows that 30 per cent of these respondents said they would favour a short-term mortgage while the remainder would prefer a long-term fixed interest rate.

James Caldwell, director at Fairinvestment.co.uk, said that fixed-rate deals allow homeowners the security of knowing what their monthly repayments will be.

“The public are obviously wary of exposing themselves to the economy at large and are acting accordingly,” he stated.

Mr Caldwell indicated that consumer confidence has been affected by the uncertain economic outlook when the Council of Mortgage Lenders has announced recently that in 2007 there were 27,000 homes repossessed.

The survey also found that 23 per cent of homeowners would favour a tracker mortgage, nine per cent would opt for a discounted mortgage, eight per cent would chose a variable rate mortgage and three per cent would go for a stepped deal.

Meanwhile, according to research from the BBC, more than half of the repossession orders in the UK are brought by subprime lenders.

Tags: Fairinvestment.co.uk, new research, research, fixed rate mortgages, fixed rate mortgage

First-time buyers must look at mortgage ‘options’

People buying a property for the first time are urged to look at the options available to them, said FirstRungNow today.

The property advisors said that, while fixed rate mortgages provide a risk free service, first-time buyers have a range of possibilities available to consider.

Helen Adams, managing director of FirstRungNow, said: “I’m not a great fan of interest only mortgages, myself, because it doesn’t actually help you invest towards your own home – you just pay off a loan.

“But certainly there are some other shared equity or shared appreciation mortgages which offer a solution.”

She added that “long term payback periods” were beneficial because they allow repayment to take place over an extended length of time, taking pressure away.

However, she said, some people only look to the short term and want to be financially “mobile” adding that 100 per cent mortgages a good for people who are not able to provide a deposit or pay stamp duty.

Chancellor Alistair Darling recently announced proposals to assist lenders in providing more ten-year fixed rate mortgages.

Tags: Chancellor Alistair Darling, rate mortgages, cent mortgages, Mortgage loan, today.The property advisors

Sharp decline in first-time buyers

Britain has seen a steep decrease in the number of people investing in property for the first time.

The number of first-time buyers has gone down by 20 per cent since March this year, according to research by YouGov.

Partly blamed on mounting house prices and inflated interest rates, the reduction is also put down to a swelling of the buy-to-let market and a decrease in the properties available for purchase.

Head of mortgages at moneysupermarket.com, Louise Cuming, commented: “The past month has been fraught with uncertainty and lenders have begun acting independently of the Bank of England in terms of rate pricing.

“It’s not surprising some potential first-time buyers are getting cold feet and steering clear of home ownership.”

She added that figures from the Council of Mortgage Lenders shows the proportion of first-time buyers to have dipped six per cent against total borrowing in the first six months of this year compared to the same time-frame last year.

The website reported that a total of 56 per cent of homeowners have a fixed-rate mortgage whereas over a quarter choose to go for a fixed-rate of just three or five years.

Tags: Owner-occupier, Moneysupermarket.com, time.The number, bank of england, fixed rate mortgage, first time buyers, cent, steep decrease

Fixed-rate mortgages on expensive buys

Property investors are advised to take out fixed-rate mortgage when purchasing high-value properties.

According to Bestinvest, when mortgage repayments increase by even a small amount, homeowners paying off debts on a high-value property can find their repayments increasing dramatically.

With any changes to the Bank of England’s interest rate, house prices and borrowing costs are directly impacted. With a fixed-rate mortgage, buyers are not vulnerable to these fluctuations.

Peter O’Donovan, mortgage manager at Bestinvest, advised that young professional first-time buyers should consider a mortgage with a fixed rate: “It obviously is down to the person’s view of risk, and what they have in the background to support their mortgage repayments.

“But in general I would suggest to people borrowing a larger sum for the first time to take a fixed rate, because it’s quite a large part of their disposable income going [towards repayments].”

The latest statistics from the Council of Mortgage Lenders show that 3,000 mortgages worth £250,000 to £500,000 were taken out in July this year by first-time buyers. This represents a rise from January’s figure of 2,000.

Tags: first time buyers, risk, figure, fixed rate mortgage, Peter O'Donovan, GBP