Low-rate fixed mortgage deals tempt home buyers
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.