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My mortgage fix ends in January – how low could rates get by then?

July 29, 2024July 29, 2024 interestratesinfo

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Is the mortgage market turbulence getting you down? Have you got a mortgage-related question you need answering? Email in and we’ll get one of our experts to reply. Nick Mendes, mortgage technical manager at John Charcol, has given his advice to a reader below. If you have a question for our experts, email us at money@inews.co.uk.

Question: My five-year mortgage fix ends in January next year. We have a 80 per cent loan-to-value mortgage and were paying under 2 per cent. I know we’ll pay much more from next year, but I just wondered if you could share any insight on what sort of rate we might be looking at?

Answer: There has been considerable mortgage rate repricing among lenders in recent weeks. With a bank rate reduction imminent – whether on 1 August or 19 September – we finally appear to be heading towards an easing of rates.

Mortgage rate hopes as one lender offers below 4%

July 29, 2024July 29, 2024 interestratesinfo

Mortgage rates have fallen as competition between lenders intensifies ahead of the Bank of England’s next rate decision.

The average rate for a two-year fixed deal, which had been very close to 6% at the start of the month, is now at 5.79%, according to the financial information service Moneyfacts. The average five-year rate is 5.39%.

The Nationwide has become the latest lender to move, by reducing its five-year fixed mortgages, for new customers moving home with a 40% deposit, to a rate of 3.99% plus a fee.

Mortgage analyst Kylie-Ann Gatecliffe said this could be the start of a “rate war” between the big banks.

The last time Nationwide – the UK’s biggest building society – offered rates below 4% was in February.

“Although this is only available for purchases right now, we hope that the re-mortgage market will follow,” said Sarah Tucker, founder of The Mortgage Mum.

Matt Smith, from property portal Rightmove, said: “We’ve seen average mortgage rates drop at a pace not seen for a while this week.

“The first sub 4% rate for those with larger deposits and prepared to pay a higher fee is the headline-grabber, but we’ve also seen some notable drops in rates in other loan-to-value brackets which should benefit more mass-market movers.”

Meet Generation Rent: Three in 10 younger Brits prefer to rent than buy a home

July 29, 2024July 29, 2024 interestratesinfo

New research reveals three in 10 Brits aged 18-34 can afford to buy a home but choose to rent, with renting a big topic of focus for the Labour party following their landslide victory, which includes plans to protect tenants more and new energy efficient targets.The research, conducted by popular rental brand UNCLE, has delved into British renters’ stance on renting vs homeownership. Being financially stable enough to get a foot on the property ladder is a huge factor when it comes to buying a home. However, UNCLE’s research found…

Mortgage bombshell leads to surge in the number of Brits ‘going bust’

July 22, 2024July 22, 2024 interestratesinfo

The number of Britons “going bust” is up by a third on the same month last year against the background of mortgage hikes and the cost of living crisis.

Personal insolvencies in June were 10,395, which was up by 10.3 percent on May and by 32.9 percent on the same month last year.

High interest rates, which have pushed up the cost of mortgage repayments, and the fact more people are relying on credit cards to cover essentials, are seen as factors behind the increase.

The main driver of the increase in personal insolvencies is a rise in Debt Relief Order (DRO) numbers, which hit their highest level since January 2021 following the removal of the fee to apply. There has also been a rise in IVAs – Individual Voluntary Arrangements.

A DRO is an option for people in debt where they owe less than £50,000, do not own their own house, do not have any assets of value and not much spare income.

Individuals need to speak to a special DRO adviser, who will provide help to make an application to the official receiver.

Four more mortgage lenders slash rates as new home loan price war heats up amid interest rate cut hopes

July 22, 2024July 22, 2024 interestratesinfo

THE mortgage price war continues to heat up, with four more lenders slashing rates amid hopes of an interest rate cut.

TSB and Santander are the latest big names to reveal a drop in the cost of borrowing, easing the pain for homeowners and first-time buyers.

Mortgage rates remain high as the Bank of England hiked the base rate several times in a bid to tackle inflation

The base rate is used by banks to set interest rates for borrowing, including mortgages.

It has remained at 5.25% since August last year.

Mortgage Rates 22 July 2024

July 22, 2024July 22, 2024 interestratesinfo

The Bank of England held its Bank Rate at 5.25% in June, as was widely expected. It was the seventh time in a row the Rate has been frozen since it rose to its current level in August 2023. It had previously undergone 14 consecutive rises (between December 2021, when it stood at just 0.1% and August 2023).

The next interest rate announcement by the Bank’s Monetary Policy Committee (MPC) will be on 1 August at noon. The market is hoping that the Bank Rate will fall to 5% at that point.

How first-time buyers could save hundreds a year under Freedom to Buy plans

July 22, 2024July 22, 2024 interestratesinfo

First-time buyers could save hundreds of pounds on their mortgage bills under potential changes to the Government’s mortgage guarantee scheme, experts have told i.

The party’s election manifesto hinted at further changes to the initiative, which sees the Government act as a guarantor for people unable to save big deposits.

It promised to make the scheme “comprehensive” with “lower mortgage costs” and during the election campaign Labour said it will “will work with lenders” to increase uptake of the scheme – but it did not outline further details.

The party has already committed to making the existing mortgage guarantee scheme into a permanent fixture named Freedom to Buy.

The Tony Blair Institute for Global Change (TBI) told i there was potential to expand the scheme so it is compulsory for mortgage lenders, which would lower mortgage rates for first-time buyers with small deposits.

Buy-to-let mortgage market has shrunk ‘amid challenges for landlords’

July 22, 2024July 22, 2024 interestratesinfo

Strong rental demand and lending standards could mean the buy-to-let sector emerges from the downturn sooner than expected, UK Finance said.

The volume of lending for buy-to-let (BTL) house purchases more than halved over the course of 2023, according to a banking and finance industry body.

The number of new mortgage deals being granted for this purpose fell from 25,280 in the fourth quarter of 2022 to 12,422 in the first quarter of this year.

Rapidly rising interest rates played a major role in this trend, making it harder for those looking to buy a BTL property to pass lenders’ affordability tests, UK Finance said.

Watch out for sneaky mortgage tactic estate agents are using to ‘rip you off’

July 22, 2024July 22, 2024 interestratesinfo

HOMEBUYERS pressurised into using estate agents’ mortgage services face being “ripped off”, warn experts as cases of conditional selling rise.

Conditional selling, banned under industry regulations, happens when estate agents try to strong-arm or incentivise buyers to use their mortgage broker.

Buyers who refuse are told it could affect their chances of securing the property.

It’s an underhanded practice that has been around for a long time say brokers. But recently it has become more widespread.

If persuaded, buyers could wind up paying too much for their mortgage, for the property and for extra services such as insurance and legal work.

Sun Money explains how to spot signs of pressure selling and what you can do to avoid it.

How half a million homeowners will dodge a mortgage rate hike

July 22, 2024July 22, 2024 interestratesinfo

Such was the effect on households of the rise in the cost of mortgage deals that followed the Liz Truss mini-Budget in September 2022 that Chancellor Rachel Reeves is planning legislation intended to prevent a repeat of similar shock announcements on spending and tax.