House buyers have greater choice on home loans The UK mortgage market is back with a bang rather than a whimper. Competition between mortgage lenders has been heating up for some time, but now, finally, borrowers can start picking and choosing the best deals. The number of mortgages available has topped 3,500 for the first time since the financial crisis. It means much more choice at better rates across the whole loan-to-value range, even with the return of interest-only home loans with Clydesdale and Yorkshire Banks offering 0% mortgages for the first three years on some deals. Borrowers could be sitting pretty for another three years now that Bank of England has confirmed that interest rates will remain at the historic low of 0.5 per cent until employment levels fall below 7 per cent. Borrowers can get a mortgage for five years at 3.84% and for a 3 year fix at 3.54%. ( Help to Buy, launched back in April, has also encouraged banks and building societies to increase high LTV lending. So far, 10,000 people have applied to use the scheme to buy with a deposit of just 5%. The second stage of Help to Buy launches in January at which point mortgage guarantees will be available so that buyers can take out a loan with only a 5 per cent deposit with the next 15% underwritten by the taxpayer. This part of the initiative goes much further, being available to FTBs and existing borrowers buying both existing and newly built homes. Property prices are already rising in many parts of the country, increasing by 3.1 per cent in the 12 months to June 2013, driven by an 8.1 per cent upward trend in London. This may be welcomed by existing homeowners, but prices could easily race beyond aspiring homeowners who are already facing a squeeze on their incomes.
Posted on: Tue, 27 Aug 2013 11:48:10 +0000
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