Home buyers across the UK are currently seeing some of the best deals ever when it comes to mortgages as experts point out that borrowers should not be fooled by standard variable rate loans.
After the Bank of England recently launched the first mortgage product of under 1% latest figures show that the average rate of popular two year fixed rates was 1.26%, down from 1.73% twelve months ago.
In figures closer to real life, this means that borrowers with a 40% deposit would have their monthly repayments for a £150,000 mortgage drop from £616.25 to £583.14.
David Hollingworth of broker London & Country told City AM that the current rate war needs to be taken into consideration by any borrower as homeowners should make sure they review their deal and take advantage of the current market sentiment.
“Yorkshire Building Society launched the lowest rate on record at 0.89% for a two year deal with a 35% deposit. Failing to grab the chance to cut the interest rate on the single biggest outgoing is tantamount to throwing money down the drain.”
Other building societies, such as Santander and Nationwide, followed suit and also cut their rates last month.
At the same time, research put together by Paragon Mortgages showed that – after a minor drop last year – buy-to-let lending stabilised during Q1 of 2017. In the first three months of this year, the sector accounted for 18% of all mortgages handled. Remortgaging remained the most popular type of borrowing.
John Heron, managing director of Paragon Mortgages, said:
“It’s clear to see that the benefit of certainty at such low rates is continuing to drive up the popularity of fixed rate mortgages, particularly five year fixed terms, which gained further ground in the first quarter of 2017.”