Mark Hampton - SPF

Mark Hampton
Lenders embark on mortgage rate war
11 February 2015

 

Anyone looking for a new mortgage in coming weeks is in for a treat with lenders slashing pricing on their fixed and variable rates in order to drum up new business. With ten-year fixes now available from an incredible 2.94 per cent, five-year fixes at less than 2.5 per cent and two-year fixes starting from 1.19 per cent, there are some excellent deals to tempt borrowers.

There are several reasons why rates are falling. Swap rates – the rate lenders pay to borrow from each other - are very low, and lenders are tightening margins as they compete for business. The mortgage market review, which was introduced last April, slowed down the market and many lenders are now busy trying to attract business before the general election.
The other option lenders have to drive business levels is to offer more flexible underwriting and we do expect to see more of this as the year goes on. However, at the moment lenders are reluctant to push the risk curve. Borrowers may still find it tough to get a mortgage, particularly if they require interest only, are an older borrower or are self-employed. If this is the case, an independent mortgage broker such as SPF Private Clients will help guide you through the maze and tell you whether it is possible to get funding.

Rates may fall lower still but as always, if you are working to a budget it makes sense to secure a great rate now, rather than trying to be too clever. It is not a good idea to play Russian roulette with your mortgage; rates are at historic lows anyway, so you won't get a bad deal and regret it for years to come.

 

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