UK Mortgage Rate Trends You Should Be Aware Of This Year
There was fear that 2017 might see the skyrocketing interest rates. If so, what would this mean for property investors?
The first few months of 2017 has come and gone and, so far, interest rates remain stable. The EU referendum actually caused the Bank of England to go out of its way and cut bank rates to a tantalising 0.25%.
Banks in a race to woo customers
HSBC pulled a shock move and offered the lowest mortgage rate that came in at 0.99% (this was for a two year fixed rate). Then Santander came in with 0.99% for an 18 month fixed rate with 40% deposit. Even though other lenders haven’t gone quite low, you can clearly see that the market is primed for a price war that can only benefit you, the customer. As a borrower looking to remortgage your property, you have a whole host of options from which to choose and pick out amazing deals.
Why you should probably remortgage
There are, however, concerns within financial corridors stating that, despite the base rate being as low as it is right now, those of us who have £200,000 mortgages spanning over 25 years might actually see our repayments increase by about £163.81 a month or by a demoralising £1,965.72 a year should we settle for the standard variable rate.
This in itself should motivate you to remortgage. By remortgaging, you would be taking advantage of the record low interest rates and getting an excellent deal from any one of these lenders fighting for your business. Of course, the best deals go to those who already have a substantial amount of equity to leverage, but the rates remain quite competitive even if you only have 5% to put down.
Considering the fact that the average SVR stands at about 4.75% right now, you stand a wonderful chance of saving a great deal of money even if you remortgaged with a 10% deposit of equity. On average, a 2 years fixed rate starts at a low 1.89%, which is a considerable gain from the 4.75% you might be incurring now.
The prevailing trends show that rates are bound to remain low, at least for the foreseeable future. What you should be worried about is the fact that lenders may decide to tighten their lending requirements and make even harder for people to qualify for loans despite the low interest rates. The full effects of Brexit remain to be seen on the financial markets fronts, so you would do well to keep an eye on your mortgage.