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Swap Rates Up, but Competition Still Fierce in Mortgage Market


It has been interesting to note the current rise in SWAP rates on the money markets, (the future cost of funds that lenders base their fixed rates on), based on the fact that we have seen some more promising economic data and that there has been some talk of an earlier than expected rate rise from the Bank of England.

Whilst some are mooting the possibility of a Spring rise, it still seems more likely that any move will be at the end of the year rather than the beginning.

Even with this rise in costs, the rampant competition between lenders means that we are still seeing rate cuts rather than increases, from lenders desperate for a good start. A number of leading lights have made an early statement such as Barclays, Santander and Bank of Ireland.

Some lenders will be disappointed as they struggle to make the impact they hope for. Rate alone is not enough these days, service is key, but criteria will make all the difference. There are still many borrowers who believe they will struggle whether it is due to affordability and stress testing, the nature of their work and income, age, interest only requirements and such like.

Whilst more needs to be done, the good news is that there is now more choice and we are finding we can help even more people, especially those who do not believe they could get what they really wanted.

At present, 2-year fixes are available at 1.19%, (3.78% APRC) and 5-year fixes from 1.74%, (3.21% APRC) whilst variable tracker rates are around from 1.24%, (3.56% APRC).

Those looking at a Buy-To-Let product can still obtain products from just 1.34%, (4.66% APRC) for a 2-year fix.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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