In the absence of the X factor this year, UK banks have decided to compete for your mortgage vote before inflation lines close. Who will win the 40% deposit cheapest rate? You decide.
If you are in the fortunate position of having 40% + equity in your home, now couldn’t be a better time to remortgage. On Monday, Halifax offered 0.87% on a 2 year fixed rate and with some predicting rates as low as 0.75% to come, the race to win your debt has definitely heated up.
Who Benefits from mortgage rates
Equity rich remortgagers who can afford to either reduce payments, invest in a buy to let, holiday home or help their offspring to trampette off onto the rungs of the ever distant property ladder. According to Halifax, buyers now must spend 8.1 times their salary to buy an average home. Meaning many first time buyers, will continue to watch house prices rise whilst making their pack lunch at mum and dads.
Mortgage lender competitors
Currently the hot favourite is the Halifax with its record low rate of 0.87%, 2 year fixed mortgage with an arrangement fee of £1,499.
Hot on its heels is Nationwide’s 2 year fixed mortgage at 0.91%, with an arrangement fee of £1,499.
Not to be out done, HSBC, Barclays and Platform, to name just a few, have all released similar offerings this week.
Protect your mortgage rate
If you do one thing…lock in your offer rate for 6 months. The Bank of England base rate currently sits at 0.1 per cent. Because of this, banks can offer low rates as it is cheap to borrow. With the not so silent backstage whisperings of Inflation rising to 4%, the bank of England is under increasing pressure to raise interest rates and cut back on their quantitative easing spending spree. Despite many claiming this rise is temporary. The BoE’s has indicated there will be a ‘tapered tightening on monetary policy’ over the next three years. How quickly this ‘tightening’ comes into play will depend on the next few months but the moment banks are making a loss on rock-bottom deals, you can bet there will be less hay to frolic in.
