MARKET WATCH FROM CORECO
Wed 20 Feb 2019
It’s pretty hard not to get swept up in the swathes of political nonsense going on at present, with MPs even willing to resign from their parties to try to affect some kind of change. However, it is important to remember that there is a market out there and for most people, life goes on regardless. And so it should.
Despite all the shenanigans, the mortgage market is still in rude health. There has been quite a big focus in recent weeks on the First-Time Buyer market and mortgages available to buyers with smaller deposits. In fact, it has got so competitive in this market that research from Defaqto last week showed that the rates available on 95% Loan-to-Value mortgages had dropped to record lows.
We have seen a definite move from lenders to be more competitive in the high LTV end of the market, especially as First Time Buyers seem to have been staging a comeback over the past few months.
It is definitely a buyers’ market at the moment and with interest rates at a level where many buyers think they will not go any lower, as well as more availability of property due to tax changes in the BTL market. This has helped to entice buyers who have previously put their search on hold.
From a lenders perspective, competition has been so intense that they have naturally worked up the risk curve to where they can charge slightly higher rates and follow where the buyers are.
There has also been a welcome dose of innovation in this space, with lenders such as Barclays, Halifax and Bank of Ireland taking advantage of the Bank of Mum & Dad who want to hold on to their savings rather than simply give them to their kids. Family guarantee mortgages have been developed that fill a much-needed gap and allow a borrower access to better rates and higher LTV’s.
I expect this battle for first-time buyers will continue to be a key part of the market for the remainder of the year.
Mortgage rate wise things are still pretty much the same. For standard residential mortgages, borrowers can obtain 2-year fixes at 1.40%, (3.78% APRC) and 5-year fixes from 1.80%, (3.36% APRC) whilst variable tracker rates are around from 1.34%, (3.82% APRC).
Those looking at Buy-To-Let can still obtain products from just 1.44%, (4.44% APRC) for a 2-year tracker or 5-year fixes are available from 2.02% (4.03% APRC).
Our Best Buy Recommendations (with good current service)
Residential 2 Year Fixed
Lender: Halifax
Initial Rate: 1.40%
Until 30.06.2021
Subsequent Rate: 4.24%
Overall Cost Comparison: 3.78%
Residential Long Term Fixed
Lender: Halifax
Initial Rate: 1.80%
Until 31.03.2024
Subsequent Rate: 4.24%
Overall Cost Comparison: 3.36%
Residential Variable
Lender: Halifax
Initial Rate: 1.34%
Until 31.03.2021
Subsequent Rate: 4.24%
Overall Cost Comparison: 3.82%
Buy-to-let
Lender: Halifax
Initial Rate: 1.44%
Until 31.03.2021
Subsequent Rate: 4.74%
Overall Cost Comparison: 4.44%
Visit www.coreco.co.uk for further help and information.
Despite all the shenanigans, the mortgage market is still in rude health. There has been quite a big focus in recent weeks on the First-Time Buyer market and mortgages available to buyers with smaller deposits. In fact, it has got so competitive in this market that research from Defaqto last week showed that the rates available on 95% Loan-to-Value mortgages had dropped to record lows.
We have seen a definite move from lenders to be more competitive in the high LTV end of the market, especially as First Time Buyers seem to have been staging a comeback over the past few months.
It is definitely a buyers’ market at the moment and with interest rates at a level where many buyers think they will not go any lower, as well as more availability of property due to tax changes in the BTL market. This has helped to entice buyers who have previously put their search on hold.
From a lenders perspective, competition has been so intense that they have naturally worked up the risk curve to where they can charge slightly higher rates and follow where the buyers are.
There has also been a welcome dose of innovation in this space, with lenders such as Barclays, Halifax and Bank of Ireland taking advantage of the Bank of Mum & Dad who want to hold on to their savings rather than simply give them to their kids. Family guarantee mortgages have been developed that fill a much-needed gap and allow a borrower access to better rates and higher LTV’s.
I expect this battle for first-time buyers will continue to be a key part of the market for the remainder of the year.
Mortgage rate wise things are still pretty much the same. For standard residential mortgages, borrowers can obtain 2-year fixes at 1.40%, (3.78% APRC) and 5-year fixes from 1.80%, (3.36% APRC) whilst variable tracker rates are around from 1.34%, (3.82% APRC).
Those looking at Buy-To-Let can still obtain products from just 1.44%, (4.44% APRC) for a 2-year tracker or 5-year fixes are available from 2.02% (4.03% APRC).
Our Best Buy Recommendations (with good current service)
Residential 2 Year Fixed
Lender: Halifax
Initial Rate: 1.40%
Until 30.06.2021
Subsequent Rate: 4.24%
Overall Cost Comparison: 3.78%
Residential Long Term Fixed
Lender: Halifax
Initial Rate: 1.80%
Until 31.03.2024
Subsequent Rate: 4.24%
Overall Cost Comparison: 3.36%
Residential Variable
Lender: Halifax
Initial Rate: 1.34%
Until 31.03.2021
Subsequent Rate: 4.24%
Overall Cost Comparison: 3.82%
Buy-to-let
Lender: Halifax
Initial Rate: 1.44%
Until 31.03.2021
Subsequent Rate: 4.74%
Overall Cost Comparison: 4.44%
Visit www.coreco.co.uk for further help and information.