Those who are on a standard variable rate loan are laughing all the way to the bank. But the question of when the base rate will rise is a constant worry hanging over all borrowers.
Lenders have launched a raft of new fixed rates for homeowners – great news for those who prefer to know for sure what they will be paying over the next few years.
Cheer for rookie and ‘veteran’ homeowners alike
If, like around half the homeowners Nationwide Building Society surveyed, you’re more than happy to stay put, then you’ll be glad to hear remortgaging rates are coming down.
And if you want to get a foot on to the property ladder it’s great news too for you too. The new batch of lower fixed rates give you a cheaper start and longer-term security than of late.
Half a percentage point cut
One to take a look at is First Direct, which was one of many mortgage lenders to cut its rates this week. It has cut rates on all five year fixed rate repayment mortgages by 0.50%, and lowered rates on some of its ‘limited edition’ mortgages.
Barclays may have been in the headlines for all the wrong reasons of late, but it you’re after a fee-free deal with a great fixed rate then its mortgages range is well worth a look.
The lowest fix ever
At first glance HSBC’s 2.99% five-year fix is a no-brainer. It is after all the lowest-ever five–year fixed rate offered to the UK market. But it comes with a couple of caveats. Like a hefty fee, and by hefty I mean a whopping £1,499, and a minimum deposit of 40%. But if you can stomach that, then you’re undoubtedly on to a winner.
Deals for first-time buyers
According to Moneyfacts, the three deals available, based on their smaller deposits, lower fees and higher LTVs are:
Its discounted variable rate will go up if the base rate moves, so its not as stable as a fixed rate, but at a current rate of 3.84% for two years, rising to 3.94% after that the APR works out at a current 4%. You can borrow a maximum of 90% of the value of the property, so only need to worry about a 10% deposit. The good news is that’s all you have to stump up at the start, as there’s no product fee.
Newcastle Building Society
If you want the extra security of a fixed rate, then the best bet at the moment is Newcastle’s 6.25% fix until 30 September 2014. You can borrow up to 95%, so only need a 5% deposit and again there is no product fee. The APR, which enables you to work out overall costs and compare them with other lenders, is 6.3%.
The Mansfield Building Society
The lesser-known Mansfield BS is offering a 90% loan with a discounted variable rate of 4.19% currently. The discount lasts of three years and the overall APR is 5.4%. As well as the 10% deposit you would though need to stump up fees of £999.
You can check out mortgage deals on the TotallyMoney website.
Deals for remortgaging
With some very tasty deals on offer, homeowners who are worried that the Bank of England base rate will go up soon can buy themselves some security for a couple of years at least.
Little surprise that HSBC tops this table of best buys too. Its market-leading two-year discounted variable rate of 2.49% comes with a £499 fee, but a relatively low 60% LTV, so it’s not one for homeowners with a big mortgage in relation to the value of their home.
Leeds Building Society
If you have an LTV of 75% then you’re looking at 3.20% from Leeds. It charges a £199 fee and will give you a discounted variable deal for two years. As with HSBC there are no tie-ins beyond the discounted rate period.
Furness Building Society
Nor are there any tie-ins beyond the discounted period with this 3.29% three-year discount mortgage from Furness. Better still there is no fee and the LTV is as much as 80%.
As always it’s important to do your homework, shop around and make sure you get the best deal for you. Take into account not only the headline rate but also any fees you’ll also have to pay.
But do your research thoroughly and you could even manage to avoid an initial fee altogether – something that has been almost impossible – until now.
REMEMBER: YOUR HOME MAY BE REPOSSESSED IF YOU DON’T KEEP UP REPAYMENTS ON YOUR MORTGAGE