Blog Archives

Brexit uncertainty causes mortgage approvals to fall in June

26.07.2016

Mortgage lending and approvals fell back in June, according to the British Bankers’ Association, because of uncertainty surrounding the Referendum.

A month on from the decision to leave the European Union, it is too early to say for sure what impact this has had on the market. June’s mortgage lending figures are too close to the event to be truly conclusive, although they indicate that lower mortgage lending and approvals were a result of uncertainty. However, gross and net mortgage borrowing were still both higher than a year ago. Approval numbers also picked up from April, where numbers were lower following a surge in the first quarter as landlords brought forward buying decisions.

Remortgaging is on the rise, a trend we expect to see continue over coming months. This is not so much because borrowers fear a rate rise – on the contrary it looks increasingly as though the next move in base rate will be downwards – but because fixed rates in particular are just so cheap.

Jonathan Harris
Posted by
Jonathan Harris

Record low mortgage rates

08.07.2016

If you are in the market for a fixed-rate mortgage, you are in luck. Falling Swap rates – the rate lenders pay to borrow from each other – have plummeted following the Referendum and lenders have been cutting their fixed-rate mortgages accordingly.

This week, HSBC has launched a ten-year fixed-rate mortgage at just 2.79 per cent. Coventry Building Society then jumped in with a ten-year deal pegged at 2.39 per cent, although there is a maximum loan-to-value of 50 per cent. Meanwhile, Metro Bank released a five-year fix at 2.09 per cent with no product fee (up to 60 per cent LTV). Two-year fixes are cheaper still with rates starting from 1.34 per cent with a £999 fee.

While fixes are at rock-bottom, it is important not to fix for longer than you are absolutely sure about. Taking out a ten-year fix when you are buying your first flat with a friend, for example, might not be sensible as your circumstances could change significantly over the decade and you may face a hefty early repayment charge (ERC) to get out of the deal early. But if you are married with a couple of young children, a ten-year commitment during which you  have the security of knowing your mortgage payments won’t rise, may be welcome.

With all this attention on fixed rates, it’s easy to forget base-rate trackers but if you don’t need the certainty of a fix, they are worth a look. With Bank of England Governor Mark Carney suggesting that the next move in interest rates may be downwards, a base-rate tracker will not only be cheap now but could get even cheaper. Base-rate trackers start from 1.34 per cent over two years, with a £999 fee and no ERCs, so you can switch to a fixed rate at any time.

There are plenty of good deals on offer – talk to an independent professional adviser such as Anderson Harris, for more details.

Jonathan Harris
Posted by
Jonathan Harris