It really does seem that the mortgage market has entered another competitive phase with several of the big lenders reducing their rates even further to try to stay ahead of the competition and get more business in over the summer period.
This part of the year is important for lenders as for many it is an opportunity to ensure they end the year on a high as applications made in the next couple of months should complete by the end of December.
NatWest, Santander, Barclays and HSBC have all made moves last week and the Mortgage Price War is now in full effect! With Variable tracker rates dropping to 1.24%, (3.80% APRC), 2-year fixes at 1.28%, (3.80% APRC) and 5-year fixes at 1.71%, (3.29% APRC) it really is a crazy time for mortgage pricing.
This period looks set to continue for a while yet especially as the Bank of England Governor Mark Carney suggested that we could see rates fall in the event of a no-deal Brexit. Actually, he said rates could rise as well which seems to me a little like hedging your bets!
That aside it is not just about rate changes. We are seeing more lenders come into the Help to Buy space, where interest rates are also very keenly priced at present.
Elsewhere we have also entered into negotiations with a lender who may be able to lend up to 6 times income for the right applicant, showing that lenders really are trying things to lend more.
Even the Buy to Let market is feeling the rate pressure and there are now products available for landlords which are as low as I have ever seen. It really is a great time for Landlords to review their portfolios if they have not already and we are happy to offer landlords a portfolio review to see how they can restructure and potentially release more funds or just move on to lower interest rates.
We are also seeing more lenders looking at “Top Slicing”. This is where the rental income may not quite be enough to meet the lender’s normal rental calculation, but they are able to use the applicants spare disposable income to meet the shortfall.
This is proving very useful, especially in and around London and enables borrowers to purchase a property some other lenders may be refusing.
Rate wise, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.28%, (3.80% APRC) and 5-year fixes from 1.71%, (3.29% APRC) whilst variable tracker rates are around from 1.24%, (3.80% APRC).
Those looking at Buy-To-Let can still obtain products from just 1.41%, (4.86% APRC) for a 2-year fixed or 5-year fixes are available from 1.89% (3.73% APRC).