Low-rate fixed mort­gage deals tempt home buy­ers

Buckinghamshire Advertiser - - BUCKS PROPERTY -

MANY lenders are in­tro­duc­ing new mort­gage prod­ucts with all-time low in­ter­est rates as the mort­gage price war con­tin­ues, re­ports Ro­mans. “Banks and build­ing so­ci­eties of­ten cut their in­ter­est rates to at­tract more peo­ple to the hous­ing mar­ket, which can then lead to other lenders re­duc­ing their in­ter­est rates.

“This ex­plains why we have a mort­gage price war on our hands,” ex­plained Ro­mans’ di­rec­tor of mort­gage ser­vices, Greg May.

“Com­pet­i­tively low in­ter­est rates

could make buy­ing prop­erty more at­trac­tive, which could see the prop­erty mar­ket pick up.The buy-to-let mar­ket is par­tic­u­larly at­trac­tive to in­vestors as they won’t get much re­turn for their money by putting it into a sav­ings ac­count, whereas prop­erty could be a re­ward­ing long-term op­tion.”

Lenders are of­fer­ing his­tor­i­cally low rates on 10-year fixed deals, which were pre­vi­ously un­pop­u­lar with bor­row­ers but might en­joy a resur­gence as un­cer­tainty about rates leads many more to pick them.

So what ad­van­tages do longer-term deals have for home buy­ers?

Fol­low­ing the re­lease of these new mort­gage deals, a re­port was pub­lished by HSBC sug­gest­ing more than seven in 10 buy­ers would con­sider fix­ing their mort­gage for 10 years in or­der to give them more sta­bil­ity and cer­tainty.

“Just be aware that these types of long-term mort­gage rate deals tend to come with higher de­posits and larger prod­uct fees, un­less you pay a slightly higher in­ter­est rate that comes with a lower de­posit and lower fee,” said Greg.“

“If you’re look­ing to set­tle down FALL­ING RATES: Banks and build­ing so­ci­eties are of­fer­ing his­tor­i­cally low rates on many mort­gage prod­ucts, in­clud­ing 10year fixed deals. and aren’t in­ter­ested in mov­ing on again any­time soon, you could take ad­van­tage of these longer-term deals, as com­ing out of them early does of­ten come with a rather hefty early re­pay­ment charge, so you’d prob­a­bly want to try and avoid that.”

For more in­for­ma­tion con­tact Ro­mans Mort­gage Ser­vices on 0118 3219 536, or visit: ro­mans.co.uk/ mort­gages.

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