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When does it make sense to refinance your mortgage?

August 19, 2024August 19, 2024 interestratesinfo

Interest-Rates.Info - UK Mortgage & Property News - Birmingham Money - West Bromwich Money - Mortgage Brokers

There are a few scenarios where refinancing your mortgage could make sense:

It will allow you to get a lower interest rate. You might refinance if doing so will allow you to lower your interest rate, either because “interest rates have dropped since you first obtained your mortgage” or “your credit score has improved since taking out your current loan,” said Bankrate. Ideally, your new rate will be “one-half to three-quarters of a percentage point lower than your current rate” to offset costs associated with refinancing.

You want to change your loan term or structure. Refinancing can also make sense if you’d like to change your loan’s term or structure. For instance, maybe you want a longer repayment term to lower your monthly payments or maybe you want a shorter term to lower the amount you’ll pay in interest. Or, maybe you “have an adjustable-rate mortgage that’s about to convert to the variable-rate period,” in which case “you could refinance to a fixed-rate loan to guarantee predictable monthly payments,” said Bankrate.

Housing market demand surges following interest rate cut

August 19, 2024August 19, 2024 interestratesinfo

The housing market experienced a surge in activity following the Bank of England’s recent decision to cut interest rates, according to a leading property website.

Estate agents reported a 19% jump in enquiries about properties for sale after 1 August, when compared with the same period last year, research by Rightmove found.

It came after the Bank cut rates for the first time in more than four years from 5.25% to 5%.

Rightmove’s Tim Bannister said it was clear that the Bank’s decision had “sparked a welcome late summer boost in buyer activity”.

He added: “While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.

Halifax joins Barclays, HSBC, NatWest, and Nationwide in slashing mortgage rates below 4%

August 12, 2024August 12, 2024 interestratesinfo

Halifax has joined the ranks of top lenders slashing mortgage rates below 4 percent, a move anticipated to boost property sales. This week saw Barclays, HSBC, NatWest, and Nationwide also trim their leading home loan interest rates below the 4 percent mark.

These offers are currently tailored for buyers with substantial deposits and often come with hefty application fees. Yet, there’s optimism that these benefits will extend to the broader mortgage market shortly.

Halifax’s latest offerings include a five-year fixed-rate mortgage at 3.99 percent for a 60 percent loan-to-value (LTV) ratio, carrying a £999 fee. Additionally, it’s presenting a two-year fixed-rate deal at 4.36 percent with a £999 fee for up to 60 percent LTV.

First Time Buyers purchase further away to find affordable homes

August 12, 2024August 12, 2024 interestratesinfo

Moving further away from family, friends and familiar places to get onto the property ladder is becoming more common for first-time buyers, according to new research from Santander UK.

Extrapolating a survey it commissioned, it claims two thirds of Britons who bought their first home in the last two years had never seen their new neighbourhood before buying, compared to just over half (51%) of those who bought more than five years ago.

First-time buyer pitfalls: Finance expert warns of ‘common costly mistake’

August 12, 2024 interestratesinfo

People aiming to profit from their property could be making a significant and costly error in how they calculate their income.

Real estate is often viewed as one of the most valuable investments, especially if you plan to rent out the property, but a common oversight can lead to a hefty cost in the future, as one expert has pointed out.

Former financial advisor Joe Saul-Sehy, speaking on the Afford Anything podcast with Paula Pant, warned that first-time buyers frequently misjudge their gross and net income from the property because they neglect to set aside an emergency fund for it.

He advised landlords to allocate some of their rental income for future maintenance, cautioning: “For people squeezing as much water out of that sponge as they can get, (they) might also be robbing that account, which is a mistake.”

Landlord exodus ‘higher than anticipated’, says agency group boss

August 12, 2024August 12, 2024 interestratesinfo

The market is witnessing a significant shift as a number of landlords exit due to increasing legislative pressures, tax liabilities and the removal of mortgage relief, says Antony Lark, joint CEO of estate agency and lettings group Spicerhaart.

Rents have begun to stabilise, despite the exodus of landlords from the sector and resistance over rent reductions, says Lark.

He explained: “We’re noticing that the level of landlords leaving is higher than anticipated – particularly among those who’ve retired, who need the money to meet rising living costs, or are helping children buy first homes, or who’ve concerns over inheritance tax.

Flats emerge as the top buy to let investment

August 12, 2024August 12, 2024 interestratesinfo

Falling property values and soaring rents make flats the most profitable option for landlords, according to new research.

The findings from Inventory Base show that flats currently offer the highest returns for BTL investors.

Despite a slight decrease in average flat prices, rental values for flats have surged by 9.3% annually, outpacing all other property types.

The property inventory specialist compared average yields across flats, terrace homes, semi-detached and detached properties.

Martin Lewis warns UK households who have ‘fixed mortgage ending in 2024’

August 12, 2024August 12, 2024 interestratesinfo

Fixed-rate mortgage deals have dropped below 4% for the first time since April – though only for those with at least a 40% deposit or equity in their home. However, mortgage brokers say rates could continue to fall as the year goes on.

Rate cuts to fuel house price rises, Halifax says

August 12, 2024August 12, 2024 interestratesinfo

Lower mortgage costs and more interest rate cuts could fuel a rise in house prices for the rest of this year, Halifax has said.

The mortgage lender’s prediction came after property prices ticked up in July following a flat few months.

Halifax said recent mortgage rate drops were “encouraging” for first-time buyers, those moving along the housing ladder or those refinancing.

But it warned affordability challenges and lack of available properties still posed problems for buyers.

“Against the backdrop of lower mortgage rates and potential further [Bank of England] base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year,” Amanda Bryden, head of mortgages at Halifax said.

Last week the Bank of England lowered interest rates to 5% – the first cut since the start of the pandemic in March 2020, but its governor warned not to expect a flurry of further reductions.

‘Landlord licence’ now costs average of £700 as more councils force buy-to-let owners to register

August 12, 2024August 12, 2024 interestratesinfo

Thousands of landlords in England are facing increasing costs due to selective licensing schemes imposed by local councils, according to a Freedom of Information request.

The FOI request by insurer Direct Line revealed that landlords in areas which require a licence are being charged £700 on average to get one.

Councils in certain parts of England require landlords to get the selective licences in order to to rent out property, in the hope that this will improve standards and quality.

The schemes require landlords to meet certain standards of management and maintenance and are often accompanied with regular property checks.

A licence typically lasts for a maximum of five years once granted, but councils can opt to issue them for a shorter period.