For the seventh month in a row mortgage availability has increased, with the choice of products up a staggering 78% over this period. It is still true to say that the lowest interest rates are available for those with larger deposits or greater equity but nevertheless, it is a move in the right direction!
The situation for first time buyers is steadily improving with several lenders now offering mortgages with only a 10% deposit required. Those lenders that were already offering mortgages with a 10% deposit are starting to reduce rates and fees associated with these products, thus opening the door for more people to purchase their first home.
One area of concern is the more recent tendency for lenders to increase their SVR (standard variable rate) even though there’s been no increase in the Bank of England’s 0.5% base rate. Many existing homebuyers have been happy to revert to their lenders standard variable rate, as this has often resulted in lower monthly payments. However 8 lenders have already decided to increase their interest rate, with many more expected to follow. This will mean that many homeowners could see their mortgage payments rise significantly over night. Recent increases included a well known high street building society that has increased it’s standard variable rate from 3.5% to 4.95%, an increase of 1.45%.
We would therefore urge all mortgage customers to keep a close eye on their existing arrangements, to ensure they have no nasty surprises.
Peter & Gary Wright, Mortgage Advice Network, Knebworth