Since August of this year, leading lenders have made a record number of mortgages available to borrowers with the launch of nearly 1,000 new loan deals. As lenders battle for a bigger slice of the market share, prospective borrowers are now spoilt for choice with both standard variable rate (SVR) and fixed rate mortgages. With lenders offering all time lows on loyalty mortgages for existing customers and competitively low deals to attract new customers.
There are many equally attractive fixed rate options on offer from a variety of lenders, representing golden opportunities for remortgaging in particular. With a substantial deposit of 35 per cent and over, borrowers could secure a two-year fixed rate loan at under two per cent. Five-year fixed rate mortgages have also dropped to near-record lows.
The reasons behind the new loans
September’s mortgage price war and the subsequent profusion of new loans were the result of a combination of market factors. Firstly, falling swap rates led lenders to slash mortgage rates even despite forecasts of an increased base rate in spring 2015. Secondly, the introduction of stricter lending regulations in April disrupted the market, so that lenders were forced to become highly competitive in order to pick up the slack and meet end-of-year targets. Additional reasons for the lowered rates include low inflation, exceptionally high levels of housing market activity, and fears that economic growth would soon start to slow.
How long will these offers last?
Although the housing market has cooled substantially since early September, borrowers can still expect to see many reduced mortgage rates on offer, and it’s still an optimum time for anyone to look into the options available to them, whether you’re a first-time buyer or an established landlord. This is largely because of even lower swap rates in November—a result of the Bank of England’s announcement that the CPI measure of inflation could fall below 1 per cent, which means the base rate may not rise until autumn 2015. With this latest development, the final quarter of 2014 is sure to herald even more deals for borrowers.
Nonetheless, prospective borrowers would be well advised to fix their mortgages and practice financial prudence, as the cooling housing market and predicted base rate rise in 2015 are strong indicators that present low rates won’t last forever.
With so many factors coming into play in the lending market, it can be challenging to find the best mortgage deal to suit your needs and finances. At Homeline Mortgages, we have the experience and expertise to help you find the ideal rate for you. For more information, contact us today.