Mortgage Lenders have very much been the centre of attention as we go into another week, and it seems that everything in our Mortgage and Property world is changing on a daily, if not hourly basis. Having been on LBC Radio on Sunday night answering callers’ questions, it seems that there is a real thirst for knowledge around mortgages and the property buying process like never before.
Amidst all the craziness however, there seems to be some sense of a pattern emerging as mortgage lenders adjust to the current circumstances.
A couple of weeks back we saw mortgage lenders retreat and withdraw over half of the available products on the market, running to the sanctuary of 60% Loan-to-Value rates and below. Many specialist mortgage lenders withdrew from the market altogether as they tried to deal with the scale of calls coming in asking for 3-month payment holidays amidst a massively shrinking workforce as call-centres across the globe were forced to close.
Thankfully, our banking institutions are strong, well run and well capitalised these days. Over the past few days, we have seen mortgage lenders come back into the markets once more, relying on mortgage brokers even more than usual. Some have come back to 75% or 80% Loan-to-Value, whilst others have introduced a fund booking system to limit the number of mortgages that can be done each day.
Other mortgage lenders have managed to keep products available at higher Loan-to-Values and all mortgage lenders have continued to offer some competitive Product Transfer rates which brokers are able to arrange swiftly and easily for those borrowers coming to the end of their current product term.
I salute lenders for how they have started to deal with this so quickly. They have showed that, when they need to do something right like this, they do it.
The key issue is still around valuations, as surveyors have been grounded and no physical inspections can be done. Again, mortgage lenders have been pretty good in upping their Automated Valuation Models, (AVM’s) and so we are seeing more applications start to move once more. There is still gridlock in some parts of the process because of this, but every broker will know which mortgage lenders are able to move through the process and which ones will have to pause at valuation stage.
As you would expect, remortgage enquiries have been very busy as borrowers want advice on how they can lock into the new low rates and how the 3-month payment holidays work. As we mentioned in our blog about the payment holiday, or more accurately the payment deferral, it is important to take advice before applying for this as there may be other options available and we would advise not to apply for this unless it is genuinely needed.
As for mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.14%, (3.77% APRC) and 5-year fixes from 1.44%, (3.20% APRC) whilst variable tracker rates are around from 1.24%, (3.27% APRC).
Those looking at Buy-To-Let can now obtain products from 1.19%, (4.53% APRC) for 2-year fixed or 5-year fixes are available from 1.62% (3.75% APRC).
As ever, our team is still available to help and impart their knowledge and give some much needed down-to-earth advice. You can call us on 020 7220 5110 or contact us here.