Two year fixed rates fall for first time in a year
Rates are down, approvals are up and Saga's offering something a little different. All in this fortnight's mortgage market update.
October 11, 2018
Two-year fixed rates fall
The average two year fixed rate mortgage has fallen for the first time in 12 months, according to latest figures from Moneyfacts.
Average rates fell by 0.04% month-on-month. The drop comes despite the hike in Bank of England base rate this summer. Meanwhile average five year fixed rates also fell by 0.01%.
Charlotte Nelson, finance expert at Moneyfacts, says: “November 2017 marked the starting point of the upward trend in the average two-year fixed rate, with subsequent figures either rising or stagnating. This month marks not only a break away from this upward trend, but the first time the Moneyfacts UK Mortgage Trends Treasury Report has recorded a reduction to the average mortgage rate since the November 2017 base rate rise.”
Mortgage approvals hit seven month high
More good news for the housing market as the number of mortgages being approved reached a seven-month high in August, latest figures from the Bank of England reveal.
According to the stats, mortgage approvals climbed to 66,440 last month, the highest level since January 2018. The number of remortgages approved increased to 53,125 in August – the highest figure since November last year.
David Hollingworth, mortgage expert at our mortgage broker partners L&C says: “The figures are encouraging in that August saw mortgage approvals rising for both purchase and remortgage. The Base Rate rise is likely to have triggered more borrowers to review their rate in a bid to secure a better deal by shopping around. That heightened remortgage activity looks likely to persevere as a result. Mortgage rates have remained low so far which may help encourage homemovers too despite some of the ongoing uncertainty that Brexit may inevitably provoke.”
Saga launches equity release product
Saga has launched a new equity release product which allows customers to monthly tax-free payments from their property. The Saga Regular Drawdown Lifetime Mortgage will allow people to set how much money they would like to receive each month, with a minimum of £200.
Alex Edmans, head of product at Saga Money says: “Our customers have consistently told us that they want a solution that enables them to stay in the home they love, but to use it as a way of generating additional monthly money. For many, that means they can pay their bills or financially support their children, whilst others can go out and socialise with friends a little more often or treat themselves occasionally.
“However, we believe that there needs to be more innovation in the industry to help people make the most of the equity in their homes but in a way that works for them. We are delighted to be challenging the market with the launch of our new regular drawdown lifetime mortgage, which enables homeowners to use the equity in their homes to really make a difference to their lives.”
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