It has been a relatively quiet week in the mortgage market, especially after the imminent threat of a Bank of England rate hike passed by with barely a whimper.
That is not to say that the threat has now receded, in fact far from it as inflation has now hit the 4.2% level in the year to October, reaching the highest point in a decade.
However, the Bank of England has already said that this may hit 5% by the turn of the Year and they seem confident that the causes of this inflation, energy prices and general costs driven by shortages, are temporary in nature and would not be affected by increasing interest rates in the short-term.
It does remain to be seen how long they can keep their powder dry for, especially as the latest UK jobs figures were also stronger than predicted, with the markets already having priced in a rise in the short-term.
This has caused mortgage lenders to review their pricing on a pretty constant basis, taking into account both the cost of funds on one hand and competitive pressures on the other as lenders look to build a pipeline that will help them to get a kick start next year.
So, we have seen some lenders increasing rates, whilst others reduce them in an endless spiral of repricing up and down, sometimes with little notice.
There have been some positive criteria changes from lenders with TSB for example increasing their LTVs on New Build flats up to 85% and other lenders improving their income multiples, all of which bodes well for a more “normal” set of criteria across the board going into the New Year.
As the range of choice increases, this means that more and more prospective buyers will be able to be helped and the role of a good broker to help buyers find their way through the mortgage maze is more important than ever.
Have a great week.
In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.09% (3.20% APRC) and 5-year fixes from 1.26%, (2.50% APRC) whilst variable tracker rates are around from 0.79%, (3.10% APRC).
Those looking at Buy-To-Let can now obtain products from 0.99%, (4.40% APRC) for a 2-year fixed or 5-year fix are available from 1.49% (3.70% APRC).