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When does it make sense to refinance your mortgage?

August 19, 2024August 19, 2024 interestratesinfo

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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.

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.

I’ve got a mortgage offer on my new home – is it worth the £1,499 fee?

August 12, 2024August 12, 2024 interestratesinfo

Question: I’m getting a mortgage of £180,000 on a £200,000 property. The rate I have secured looks good – it’s around 4.8 per cent over five years – but it comes with a hefty £1,499 fee. How important is the fee when getting the loan? Is it worth going for a worse rate with a lower fee?

Answer: Congratulations on securing a mortgage offer of £180,000 on a £200,000 property. This is with an appealing interest rate of 4.8 per cent over five years – I assume it’s the deal from HSBC.

It’s understandable to question the product fee of £1,499, which is on the higher end. You may be considering whether going for a lower £999 fee or a fee-free option from Virgin Money at 4.89 per cent might be a better choice. The product fee raises several important questions that need careful consideration.

‘I’m a property expert – this is why mortgage interest rates are dropping slowly’

August 12, 2024August 12, 2024 interestratesinfo

In positive news for mortgage borrowers, the Bank of England finally has lowered the central interest rate for the first time in four years.

Millions of homeowners are due to come off their cheaper fixed-rate mortgage deals in the coming months, leaving many questioning what type of deal to go for next.

With a 0.25 percent cut to five percent, the Base Rate is still high and the impact won’t be felt “widely”, an expert has said. However, there are deals people may want to opt for to put them in a more “favourable” position for the years ahead.

We asked Andrew Boast, a property expert at SAM Conveyancing the current mortgage market trends, his expectations for rates over the next few months, and what length deals people should look into based on current forecasts.

10 essential questions to ask your mortgage lender before borrowing

August 5, 2024August 5, 2024 interestratesinfo

Buying a home can still be a smart move in today’s high-rate environment, of course, provided that the financials make sense for your budget. But given today’s elevated home buying costs, it’s crucial to gather all the information you need before making this substantial investment.

House prices record FASTEST annual growth since December 2022 last month, says Nationwide

August 5, 2024August 5, 2024 interestratesinfo

House prices recorded the fastest pace of annual growth since December 2022, according to Nationwide Building Society.

Britain’s biggest mutual revealed the average house price rose by 0.3 per cent between June and July.

Annually, house prices are up by 2.1 per cent, with the typical home now worth £266,334 – this is the biggest annual rise recorded over the past 18 months.

However, average prices are still around 2.8 per cent below the all-time highs recorded in the summer of 2022.

Property prices reached £273,751 in August 2022, before falling to lows of £257,656 at the start of this year.