In preparation for an interest rate rise, lenders are now beginning to retract their record low deals that we’ve all grown accustomed to over recent years. Research from Moneyfacts.co.uk shows that the best interest rates on five-year fixed rate mortgages has increased on all loan-to-value ratios over the past month. In some cases market-leading deals have even jumped by 20 basis points!
At Ainsworth Lord Estates this move comes as no real surprise to us, as it follows the Bank of England’s repeated warning that the UK’s economic recovery meant the Monetary Policy Committee was likely to start considering raising the Bank Rate at the turn of the year. So if you want to take advantage of the deals still available, locking into a five-year fixed rate mortgage, you really need to get your skates on and act now!
As a homeowner or landlord it’s really important to keep up-to-date on all the latest mortgage news, to fully prime yourself for what may be around the next corner. Here are some mortgage facts that you may not be aware of:
The Best Rates Available
For someone with a 40% equity stake on a five-year fixed rate mortgage, the best rate you can hope for is 2.29%. For a 65% LTV five year fixed rate mortgage you’re now looking at a rate of 2.34% and the average cost of a 60% LTV loan is 2.66%. It may seem like you’ve blinked and missed the best rates in many years, but in reality the cost of these fixed rate deals are still significantly cheaper in comparison to last year.
Official watchdog to review MMR
With interest rates are on the up, The Financial Conduct Authority has just announced that they will be holding a review of the mortgage market, in response to last year’s controversial Mortgage Market Review (MMR). The official watchdog will now investigate how the stricter mortgage rules have hit consumers, as well as the housing market in general. The FCA’s director of strategy has also hinted that the authority would look at trying to increase competition amongst mortgage lenders, to the benefit of consumers. So this is definitely something to keep your eye on in the coming months.
Mortgage Interest Relief Cuts
In his first Budget under a Conservative majority, Chancellor George Osborne announced that those with buy-to-let mortgages will only be able to offset interest against costs at the basic rate of tax, 20%. This is a really momentous change for UK landlords, who’ve become rather accustomed to the current rate on offer; 45%. Planned to be phased in gradually over a 4 year period from April 2017, many now fear that it will be the tenants who lose out; as landlords could be forced to increase their rents to recover the shortfall of the relief.
Accurately calculate your mortgage repayments and ensure that you’re able to comfortably pay back what you plan to borrow, with Rightmove’s free online mortgage calculator HERE.
Need any more mortgage advice? Please get in touch with one of the Ainsworth Lord team today, on 01254 760660 or email: Darwen@AinsworthLordEstates.com.