January 15, 2010
Fixed Rates Falling – Time For A New Loan?
This year has started positively for the UK mortgage market as a host of lenders reduce their fixed rates – is it time for you to take advantage of these cheaper loans?
For a long time it has been beneficial for people to stick with their existing loan – base rate is low and variable loans are as cheap as they have ever been. But now lenders are warming and have seen that house prices have stabilised so as a result they have cut their fixed rate deals.
Yorkshire, Chelsea, Coventry, Halifax, HSBC and Nationwide all cut some fixed rates recently and ITL mortgages expanded its range to include competitive fixed rate deals also. Also, you can be sure that if this many lenders have chosen to lower fixed rates, other lenders will follow suit so as not to miss business opportunities.
Ray Boulger, senior technical manager at John Charcol says: “There is undoubtedly an increase in competition and lenders are far less dependent on swap rates for their new funding, rather looking toward their savers to balance the books.
"It seems that they are becoming more comfortable with the wider economy also, most notably the bounce in house prices and the expectation that interest rates will remain low for some time – resulting in far less repossessions than initially expected. And, underlying all this, is a modest improvement in wholesale funding."
So lenders are happier and have much better offers on the table. The only question is could one of these new loans be right for you? You may have been on your variable rate for some time and it might be time to assess whether it's prudent to stick or twist – so call your mortgage adviser now to find out.
SOURCE: John Charcol, 11/01/10
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