06Sep

The seven-year itch

Both Coventry Building Society and Barclays Bank have announced the launch of some highly-competitive 7-year fixed rates.

These deals not only offer longer term security for borrowers, but have been priced to match the cost of some of the best 5-year fixed rates currently on the market. 

Deciding how long to fix your mortgage for is not an easy decision, and for some, locking in to a deal for 10 years may seem too long. These new offerings will provide a useful alternative for homeowners.

The recent vote to leave the EU has resulted in a degree of uncertainty, and this combined with falling funding costs could mean that now is the perfect time for borrowers to grab some peace of mind for the medium to long term.

These deals do carry Early Repayment Charges throughout the fixed period, so it’s important to be mindful of any potential changes in circumstances over the next few years.

Fixing for this length of time will not suit everyone, but for some a seven year deal will provide peace of mind for the future, and being able to do so at record-low rates is an added bonus.

06Sep

Leeds Building Society improves its Buy-to-Let criteria 


Leeds Building Society has introduced a greater degree of flexibility into its criteria, by announcing that it will no longer impose a maximum tenancy period for Buy-to-Let mortgages.

Criteria regarding tenancy agreements has improved throughout the market in recent years. 

Rather than insisting on a maximum of just 6 to 12 months, most lenders now allowing tenancies of 2, and in some case 3 years. 

Very few currently go beyond this however, so the move by Leeds has been welcomed by many.

With people renting for longer, and an increase in the number of families with children living in the rental sector, there is a definite need for more security of tenure. 

Leeds has now opted to accept agreements for a time period which is suitable for both landlord and tenant. 

This will provide more choice for those who would prefer to have a longer agreement in place and offer a greater level of security for both parties.

06Sep

Fixed or variable?


Falling funding costs and a recent cut in the Bank of England Base Rate means that the choice of mortgage deal is as good as it’s ever been for borrowers.  

Fixed rates are currently at record lows, so now is the perfect time to protect your mortgage payments for the foreseeable future by locking in to one of today’s highly competitive rates. 

With talk of another cut in the base rate later this year, some borrowers will be attracted to variable rates, such as trackers or discounts, and the chance to make savings now. Many of these deals also come with no Early Repayment Charges, so the flexibility on offer can prove useful.

It is worth noting however that, since the base rate cut, some lenders have already increased the margins on their tracker mortgages, and others are likely to follow suit. 

It is also worth checking the small print, as some tracker deals contain a collar, which would prevent it from dropping any further.

The choice of mortgage comes down of course to personal preference, but it’s important to consider how much room you have in your budget to cope with rising payments.

Anyone concerned about the prospect of an increase should look to fix now and take advantage of some rock-bottom rates.

06Sep

Bank of England cuts base rate


Last week saw the Bank of England cut Base Rate for the first time in over 7 years, to a historic low of just 0.25%.

The move follows months of speculation, and mortgage-holders will now be keen to find out what it means for them financially.

Most borrowers with an existing tracker mortgage linked to the base rate should see the full 0.25% cut passed on to them, and a drop in their monthly payments as a result. 

It is worth checking the small print however, as some lenders have applied a ‘collar’ which would prevent the payable rate from falling below a certain level.

Homeowners currently on a Standard Variable Rate may have to wait a little longer to see what their lender will do, and there are no guarantees that the full cut will be passed on.  

Many will be tempted to wait and see what their lender will do over the coming weeks. Rather than settling for a small drop in their rate however, it makes sense to review the market and find out what other options are available. 

There are much lower rates to be found and the savings will be far more significant.

02Aug

Ten-year fixed rates

There has been good news for borrowers over recent weeks, as lenders have responded to falling funding costs by launching some record-low 10 year fixed rates.

Products that lock borrowers in for that length of time have not always proved popular, but the gap in margin between interest rates for 5 and 10 year deals has reduced significantly. 

Certainly the prospect of protecting your mortgage payments for the next 10 years at a record low rate will be attractive to many, particularly in such uncertain times.

Borrowers need to be aware however that the majority of long term deals carry Early Repayment Charges for the length of the fixed period.

It is important therefore to consider any changes in circumstances that could occur over the next decade, and whether more flexibility is needed. 

This type of deal is not suitable for everyone, but for the right person it could provide peace of mind for the foreseeable future.


Guild Mortgage Service, Provided by London & Country Mortgages

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