Mortgage selection is improving and interest rates are falling, causing “great news for borrowers” | Personal finance | Finances
With Stamp Duty Land Tax (SDLT) coming to an end, many will be interested in learning about the mortgage product choices and the interest rates on offer. And according to the latest Treasury Report data from Moneyfacts UK Mortgage Trends, there is good news for borrowers and potential homeowners alike.
That is an increase from 269 in the last month alone and the highest since March 2020 when the level was 5,222.
In addition, Moneyfacts stated that it is the first time since June 2018 that the availability has increased across all individual loan-to-value levels (LTV).
However, it is borrowers seeking higher LTV products who have seen the greatest improvements in selection.
In particular, 95 percent of LTV borrowers saw an increase of 61 products compared to June 2021.
There is more good news when it comes to pricing.
For the second time in the last 12 months, both the average total two-year and five-year fixed rates fell to 2.55 percent and 2.78 percent, respectively, according to Moneyfacts.
In both cases, the reduction was 0.04 percent, which is the largest monthly reduction for both tariffs since June 2020.
They are well above their respective year-over-year rates, however, as the money comparison website posted record lows of 1.99 percent and 2.25 percent for these rates in July 2020, respectively.
Eleanor Williams, Financial Specialist at Moneyfacts, said, “The choice for those looking for a residential mortgage again increased significantly between June and July as volume increased by 269 new products and the total increased to over 4,500.
“In the last six months alone, availability has rebounded 1,619 – or 56 percent – and for the first time in over three years we’ve seen an improvement in selection across all LTV grades this month, great news for borrowers too any equity level or down payment.
“Our data shows that there is more reason to be positive, as both average two- and five-year aggregate interest rates have decreased.
“At 2.55 percent, the average two-year interest rate is its lowest level since February (2.53 percent), while the average five-year interest rate is 2.78 percent, the lowest since April (2.77 percent).
“Although the two-year total interest rate is 0.06 percent above the corresponding interest rate before the July 2019 pandemic, the five-year total average interest rate is 0.07 percent below the corresponding two-year interest rate (2.85 percent) and could indicate that lenders are too longer-term Rate fixed rates more competitively, potentially reflecting a shift in borrowers’ focus to ensuring stability in these uncertain times. “
So is there anyone who has particularly benefited from the mortgage rate cuts?
“First-time buyers and those considering a higher LTV mortgage will benefit most from rate cuts, with average two- and five-year fixed rates falling 0.15 percent and 0.08 percent, respectively, at 90 percent LTV, compared to 95 percent Percent LTV drops 0.09 percent and 0.06 percent, respectively, but also it’s impossible to ignore the growing number of vendors offering deals below one percent to entice borrowers with higher equity or deposit levels, “Williams said .
“According to the latest Halifax House Price Index, property prices were down 0.5 percent, likely related to the end of the stamp duty, but that doesn’t detract from the fact that total prices are up about 8.8 percent year-over-year .” Base.
“Demand for the very limited supply of real estate could remain high as the appetite continues for either the real estate managers or larger properties with home offices and outdoor space, and those borrowers may be lured by the potential savings that lower mortgage rates could bring . “
However, given the low mortgage rates, Ms. Williams warned it may not stay that way forever.
She said, “Competition is evident across the residential mortgage sector, but there is no guarantee that rates will continue to fall or how long these record-low deals could be available in their own circumstances would be a wise move for any prospective borrower.”