Keeping doctors and dentists informed with the latest mortgage news and rates.
The current base rate still stands at 0.5%, implemented in March 2009 to help the UK economy back on it’s feet after financial crisis set in. There has been speculation around rate increases for a while now and subsequently expert opinion at present is that the rate rise will happen, but only as early as early 2016.
How could this affect your mortgage?
This does not constitute advice and advice should be sought in all instances before acting on it.
The anticipated rate rise
Mark Carney, Governor of the Bank of England announced in July that he anticipates a gradual rise in interest rates over the next three years, starting no sooner than early 2016.
He also commented that the rates were likely to rise slowly and still remain much lower than the average historical value, which was around 4.5%.
As the UK economy is reviving now and with unemployment at a low level, a rate increase appears on the cards, although other economists are still non committal about when this change will actually occur.
Remortgaging before it is too late
In June 2015, according to data from the Council of Mortgage lenders (CML), remortgage value increased by 34%, to £5.1 billion, as thousands of homeowners rush to grab a lower rate of interest before any rate rise.
If you are on a variable Tracker mortgage it would be worth getting some calculations prepared by a financial adviser who can assess the likelihood and amount of your repayment increasing in line with a rise in rates.
It is considered that those with a variable Tracker mortgage could be affected the most, although if a mortgage was arranged after April 2014, a mortgage adviser would needed to have fully assessed your financial situation under the new Mortgage Market Review (MMR) regulations, to ensure you could survive a rise in interest.
Moving house, first time buyers and buy-to lets
Those moving house borrowed £6.4 billion in loan value in June, 7% increase year on year, reports CML.
The value of first time buyer mortgages though remained static at £4.2 billion*.
June was also a successful month for buy-to-let, with many landlords opting to remortgage – up 64%* and with a total remortgage loan value of £1.8 billion*.
New buy-to-let mortgages also increased 40%* to value £1.4 billion* of lending in total.
All in all, Bank of England figures show that mortgage lending increased by the largest value in seven years. In addition, there was an increase in mortgage approvals, just over 66,500 up from just under 65,000 in May 2015.
* CML
Examples of the latest interest rates – ACT NOW
- 2 Year @ 1.39%
- 3 Year @ 1.89%
- 5 Year @ 2.23%
- 10 Year @ 3.14%
Offset Products
- 2 Year Fixed @ 1.74%
Smaller Deposit – Purchase/Remortgage
- 90% 2 Year @ 2.89%
- 85% 2 Year @ 2.05%
Buy-to-let arrangements for Purchase/Remortgage
- 75% 2 Year fixed @ 2.59%
The average lender’s Standard Variable Rate is now 4.49% (BOE July 2015)
The above does not constitute advice and advice should be sought in all instances before acting on it
Read more of Chris’s monthly mortgage updates:
– June 2015
– July 2015
Get a mortgage review with Chris
If you would like us to undertake a review of your current mortgage deal or you are thinking of purchasing in the near future and require funding, please contact Chris for a free, no obligation appraisal.
Tel: 01403 780 770