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500,000 UK households warned mortgage rate will be hiked to 9.24 per cent

August 19, 2024August 19, 2024 interestratesinfo

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

Half a million homeowners are on ‘rip-off’ mortgage rates of up to 9.24 per cent due to easy mistake. Borrowers who fail to take out a new mortgage in time before the term ends are automatically shifted on to their lender’s Standard Variable Rate (SVR) where costs can top 9.24%.

The average two-year fixed rate is currently 5.66 per cent, according to data site Moneyfacts.co.uk, while the average five-year fix is 5.3 per cent. In comparison the average SVR is a whopping 8.16 per cent, the Sun newspaper has reported.

When does it make sense to refinance your mortgage?

August 19, 2024August 19, 2024 interestratesinfo

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.

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.

‘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.

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.