Will we soon be shopping for mortgage rates below 1%?
A market war is on the horizon as sub-1 per cent deals draw ever closer. Over the last few weeks, lenders have introduced increasingly low rates, each one bringing us closer to the sub-1 per cent level. Clearly, low mortgage rates mean good news for some, but are they necessarily the best deals?
What’s the good news?
The good news is these low rates give more borrowers the chance to get on the property ladder, subject to the borrowers passing the lenders’ stress tests. Lenders are keen to grab whatever market share they can, and offering products that can attract attention of buyers can help them get the market share they want.
There is also more choice for borrowers as lenders vie for business; a fight for the lowest rates means more and more products to choose from.
The base rate rise threats seem to have subsided, and it is now resulting in a mortgage price war which could see mortgage deals go below 1 per cent for the first time ever.
What’s the bad news?
The bad news is that buyers may be becoming too focused on the initial, headline-grabbing rate, rather than the deal that would be most suited to them.
Buyers may also become cautious of these extremely low rates, choosing to carefully consider the mortgage deal they go for – especially if low rates are accompanied with high fees!
Why are lenders offering these products?
The aforementioned market share, is the simple answer. Lenders are looking for new ways to attract customers and offering these low rates can do just that.
These rates are still in relative infancy, though, so it’s highly advisable that you seek the advice of a professional mortgage adviser to discuss whether these rates are in fact the right deal for you.
Paul Wood is from Pygott and Crone– for further information call: 0800 917 7404
Email: info@pygott-crone.com or visit: www.pygott-cronefinancial.com
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is £395 of the amount borrowed.
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