This summer, (I use the British definition of the word summer), is shaping up to be one of the most competitive times in the mortgage market as lenders look to attract a wide range of different borrowers through their doors in order to bolster their lending figures and get a leg up on the competition.
Mortgage rates are already incredibly low and there are some exceptional deals out there which are not just for those with big deposits. Here we look at the three major battlegrounds for First-Time Buyers, those looking to remortgage and Buy to Let Investors.
First-Time Buyers have been returning to the market this year, trying to take advantage of the low rates on offer and the fact that a fair number of Buy To Let investors have retreated from the market. With house-price growth slowing it seems to be becoming more of a buyers market than it has been for some time.
The cheapest products available remain the preserve of borrowers lucky enough to have at least a 40% deposit, with 2-year variable tracker rates available from as low as 0.99%, (3.32% APRC), 2 year fixes from 1.04% (3.38% APRC) and 5 year fixes from just 1.59% (2.96% APRC).
However, as competition amongst lenders has increased they have started to reduce the rates available to those borrowers who have smaller deposits. Those looking for a home with a 10% deposit can now obtain 2-year fixes from 1.85%, (3.49% APRC) and 5-year fixes at 2.39% (3.28% APRC).
Competition also means that lenders have looked at their lending criteria as well as interest rates, meaning that there are now more options for older borrowers as well as, freelancers and contractors who are also catered for, often on standard products, as more and more lenders understand the changing working patterns of modern day life.
The remortgage market is about to explode as billions of pounds worth of loans are set to expire in the next three months.
As more lenders look to capitalise on this part of the market, the majority of products now offer a free valuation and free legals to help keep the cost of moving to a minimum.
Again, rates are almost crazily cheap as we have seen above and with all the talk being bandied round about inflation and potential rates rises, there is a definite opportunity for those who want security to fix in at these low levels, often reducing the payments they have been making for the past few years or using the low rate environment to keep their payments the same and knock years off their mortgage.
Over the past few months that there has been a whole raft of tax changes and new regulations that will affect all landlords, specifically come September of this year when lenders will have to change the way they look at landlords with four or more properties.
Whilst this means there will be some changes, it also opens more opportunities for landlords to re-structure their portfolios in a more efficient way, ensuring they are best placed to continue to expand their property investments.
As the Buy To Let lending market has slowed significantly, lenders have again resorted to cutting rates to new lows in order to further attract applications. As a result, we are now seeing landlords being offered rates from 1.34%, (4.68% APRC) and 2.09%, (4.03% APRC) for a 5-year fixed rate.
Although the words, “Get ‘em whilst they are hot” does not apply to the English Summer, mortgage wise they seem very apt.