Keeping doctors and dentists informed with the latest mortgage news and rates.
The already rock-bottom interest rates fell again in May 2015, according to Bank of England figures, yet the number of approved mortgage deals and the value of lending also fell in the same month. Now the General Election is well behind us though, there has been a surge again in lending again.
Homeowners are paying the lowest ever mortgage rates – are you?
This does not constitute advice and advice should be sought in all instances before acting on it
Further reduction in interest rates
Interest rates continue to fall in the rate war between lenders. An average five year fixed rate deal can be obtained for as little as 2.59%, with a 25% deposit. This is almost 0.4% lower than the previous lowest rate.
Low inflation and Eurozone issues could stall an increase in the base rate, experts suggest. However, there remains much speculation around this topic.
Small dip in lending
The number of mortgages approved in May 2015 did take a small dip.
Reuters had predicted 68,700 approvals for May, yet actual figures show it was just short of 64,500. April 15 figures reported over 67,500, leaving a decline of around 3,000 in the month.
This is expected to be due to pre General Election hesitations, and figures since suggest activity is picking up again.
Deposits reach post-recession levels
In May 15, deposits for house purchases reached the highest level since 2009, according to the National Mortgage Index. The average deposit required now is in excess of £72,000, exceeding figures from June 2014, which showed average highs of circa £71,500.
Rising house prices account for much of this so borrowers are forced to take on larger loan commitments and put forward larger deposits. However, many home owners will have in recent years built good levels of equity in their property that can be used as a deposit for their next property, which is included in these averages.
Where the real issue lies is for first time buyers, as raising this level of deposit proves difficult and unfortunately for many, impossible. The Help to Buy ISA may be able to assist some first time buyers to get onto the property ladder, but for many it is just going to be a waiting game to see if house prices fall or whilst they make sufficient savings.
Examples of the latest interest rates – ACT NOW
- 2 Year @ 1.39%
- 3 Year @ 1.84%
- 5 Year @ 2.29%
- 10 Year @ 2.99%
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 @ 2.75%
The average lender’s Standard Variable Rate is now 3.56% (BOE May 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
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