Move fast, there are still lots of good mortgage deals around, says Lorna Blackwood
INTEREST rates have risen four times since August; there is now the threat of more increases to come, with some pundits predicting that the base rate could climb as high as 6 per cent by the end of the year. But mortgage borrowers can still escape some of the impact of those increases if they act now to secure the best deals.
REMORTGAGES
Homebuyers whose discount fixed-rate deals are expiring are taking steps to protect themselves against the higher cost of borrowing by arranging new deals. Most are choosing the security of two-year fixed-rate loans – there are still some good offers available as our table shows. Melanie Bien, of Savills Private Finance, says: “Whereas in the past people have drifted on to standard variable rates, homeowners are much more savvy and want to secure a good deal before their repayments shoot up.”
“People are prepared to batten down the hatches for the next 24 months,” says Simon Tyler, of Chase de Vere Mortgages. “However, in the long term they are quite optimistic about their financial situation, confident that they will stay in employment and, indeed in some cases, get a pay rise.”
If you last remortgaged two years ago, you may be surprised by the new policies adopted by lenders in the interim. Most banks and building societies are now concentrating on affordability, rather than salary multiples. The result is you may be able to borrow much more than you thought. Whether you should do so is, of course, another question.
BUY-TO-LET
Undeterred by bank rate rises, falling yields and a crackdown on unpaid tax, buy-to-let investors are still actively seeking to take out loans. “The majority of buy-to-let owners are serious, committed investors looking at the long-term view,” says Jonathan Cornell, of Hamptons Mortgages.
Banks and building societies have relaxed their criteria for buy-to-let investors. “Lenders now see landlords as a lower risk group.”
Cornell explains that this type of borrowing was offered only by niche lending services, although more and more high street lenders are getting in on the act. In effect, buy-to-let mortgages are becoming more comparable to residential mortgages. If you are a buy-to-let investor, you may even be offered a better deal than a first-time buyer or a homeowner who is remortgaging.
“BM Solutions now have a buy-to-let mortgage that is 0.50 per cent under the bank base rate for two years with a £1,499 fee and a refund of valuation charges up to £490,” says Cornell. “Their mainstream mortgage offers 0.51 per cent under the bank base rate for two years with a £1,499 fee. So, the buy-to-let rate is only 0.01 per cent higher (£15 a year on a £150,000 loan), has the same fee and comes with a refund of valuation charges.”
Source
http://property.timesonline.co.uk/tol/life_and_style/
property/buying_and_selling/article1931791.ece
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