Mortgage Market Weekly Review

The mortgage market has been a hive of activity over the past week, not least due to the well-documented tech issues blighting the world and delaying a large number of completions last week, but also because of lenders busily changing their product offerings and cutting rates.

Halifax has followed hot on the heels of NatWest and TSB in announcing rate cuts of up to 0.22% on selected products and many main lenders have now moved down a touch.

The competition between lenders continues to simmer during the summer season as SWAP rates continue to drift down gently, with one-year money now standing at 4.75% as the markets expect two Base Rate cuts over the next few months.

Five-year SWAPs have finally dropped below the 4% level to stand at 3.85%, and as a result the lowest product now stands at 4.06%, 7.00% APRC) with Halifax. It seems only a matter of time before a lender offers a product starting with a 3 once more.

The drop in the cost of funds gives lenders room for manoeuvre, and, after a slow pre-election period, lenders are keen to start motoring once more. It is still not quite an all-out rate war, but these initial skirmishes are intensifying.

Friends Boost Borrowing Power

In a reminder that there is innovation in the mortgage market, particularly where First-Time Buyers are concerned, tech-led lender Generation Home announced that they will now allow friends to act as “income boosters” for mortgages up to 80% Loan to Value, whilst extending immediate family to include nieces and nephews up to 95% Loan to Value.

This change in criteria is ideal for those who need some additional income to help purchase a property that may be out of reach on standard affordability models. It’s an innovative approach to Joint Borrower, Sole Proprietor mortgages, giving homebuyers that extra ability to buy their home.

We also have two Yorkshire-based lenders who recently stepped forward into the First-Time Buyer market with Skipton Building Society and their 100% LTV no deposit “Track Record” Mortgage, and Accord Mortgages with their £5,000 deposit product up to 99% LTV.

Whilst these products alone will not solve all the issues around home ownership, and some borrowers may not qualify given the fact that prudent lending and affordability rules are still rightly front and centre of these schemes, it is nevertheless a start and shows what forward-thinking lenders can do when they have some innovative flair and a passion for their market.

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 4.46% (8.20% APRC) and 5-year fixes from 4.06%, (7.00% APRC), whilst variable discounted rates are around from 4.89%, (6.70% APRC) and variable tracker rates from 5.39% (7.60%).

Those looking at Buy-To-Let can now obtain products from 3.54% (8.10% APRC) for a 2-year fixed, 5.52%, (7.60% APRC) for a 2-year tracker or 5-year fixes are available from 3.83% (4.20% APRC).

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