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All the latest news, rates and need-to-knows from the mortgage world
June 22, 2017 | post last updated on November 6th, 2017
The mortgage market can be a tricky one to navigate. With rates changing on an almost daily basis, constant mutterings about what’s going to happen to Bank of England base rate and new products being launched – and pulled – regularly, it can be difficult to know where to start when you’re looking to finance (or re-finance) your home. But worry not, our fortnightly rundown will give you everything you need to know.
Base rate gossip
With inflation rising, talk continues of the possibility of an increase to Bank of England base rate (which has been at 0.25% since last August and hasn’t been higher than 0.5% since 2009). According to reports, almost half of the Monetary Policy Committee member voted for a hike at the Committee’s last meeting. However, Bank of England governor Mark Carney takes a different view. Speaking at the Mansion House dinner in London, Mr Carney claimed that, given the “mixed signals on consumer spending and business investment” now is “not yet the time” to increase rates. Watch this space.
Challenger bank Metro Bank has decided to reward loyalty by scrapping fees for existing customers looking to switch rates or seeking a further advance. The lender says it wants to establish a “long-term relationship” with its customers.
Of course, while it would be nice to get a free pass on fees, it’s important to remember that this is just one element of the mortgage. Try not to be swayed by a deal sweetener too much. Make sure you’re not missing out on a better deal elsewhere.
Get fee-free, impartial advice from our mortgage partners here
Virgin Money has cut rates on several of its fixed rate mortgages. The range now includes a two-year fixed rate at 1.28%, available up 65% loan-to-value (LTV), a two-year fixed rate at 1.52% (up to 85% LTV) and a five-year fixed rate at 1.82% (up to 65% LTV). All three have a £995 product fee.
Nationwide Building Society has also been slashing its rates. It recently reduced the rate on its five-year fixed rate mortgage to 2.34%. It’s available up to 85% LTV and comes with a £999 fee. In a bid to woo buyers, the mortgage includes an added incentive of free valuation plus £500 cashback for first time buyers (or £250 for remortgage customers).
The AA has some good news for buyers with a small deposit with the launch of its five-year fixed rate at 3.99%, available at 95% LTV. Those borrowers with a 10% deposit can access a rate of 2.88%. Both have no fees.
Competition is hotting up in the variable rate market too thanks to Tesco’s new two-year tracker at 0.98%. Available up to 65% LTV only, however, it’s unlikely to be an option for first timers.
Coventry Building Society also has some attractive variable rates on offer at present, including a rate of 1.75% up to 85% LTV. There is no early repayment charge and a fee of £999.