As expected the Bank of England Monetary Policy Committee voted to retain the BoE base rate at the present level of 0.75%pa.
The mortgage market remains competitive with some lenders reducing their interest rates slightly this month. The level of lenders’ enquiries remains steady, and in most cases the lenders have caught up with the backlog which was hindering applications in December and January. This was clearly demonstrated earlier in the month for one of our clients, whose re-mortgage application completed taking just 16 working days.
A few schemes which remain and are worth noting:
- 2 year fixed at 60% LTV – 1.44% pa, lenders arrangement fee £1,499
- 5 year fixed offset at 60% LTV – 2.04% pa, with a reduced lenders arrangement fee £999
- 5 year fixed at 60% LTV – 1.83% pa, lenders arrangement fee £1,995
Following on from last month, the First Time Buyer market has reached its highest level since 1995, with 50% of all UK homes bought with a mortgage, are being purchased by first time buyers. Whilst the incentives being offered have had some impact, it is the intense competition within the lending community which has driven down rates, and the increased number of higher Loan to Value deals providing a more accessible borrowing avenue. The growing influence of the Bank of Mum and Dad should also be emphasised, and this is an area which will undoubtedly become an even greater lending focal point throughout this year.
At the other end of the spectrum, Lifetime Mortgages and Equity Release lending have reached new heights, and we expect this to continue.
It has been reported this month that nearly 32% of current mortgage holders may have to re-evaluate their finances in later life. A combination of the end of the mortgage term, along with the reality of having an interest only mortgage, are forcing lenders to arrange debt in retirement or whilst still working after the normal retirement date.
People are having to become more realistic about how and when they will pay off their mortgage, with some recent research highlighting that some older borrowers are resigned to a lifetime of debt, with almost 8% of over 55s stating they don’t think they’ll ever be mortgage free.
Choice and flexibility within this market have developed considerably in the past few years, with many more products now available. These include options such as inheritance protection, the ability to provide a regular income or products having a drawdown facility, plus the option to pay all or part of the interest on an ongoing basis to control the roll-up of debt, etc.
We are receiving increasing numbers of Equity release enquiries which has been assisted by both the products now available and the more favourable rates, currently starting at a fixed rate for the term of mortgage @ 3.4%.pa.
The above content does not represent a personal recommendation. If you have any questions on the buy to let sector reforms, rates or the mortgage market in general, our mortgage team is here to help. Please contact the team on 020 7444 4030 or by email.
Your home is at risk of repossession if you do not maintain mortgage payments.
| Residential Repayment – although a number of these deals can be done on an Interest Only basis up to 50% | |||
|---|---|---|---|
| LTVs | Rate | Arrangement Fee | ERC |
| 60% | 2 year Fixed – 1.44% to 31/03/2021 | £1,499 | YES |
| 3 year Fixed 1.69% to 31/01/2022 | £999 | YES | |
| 5 year Fixed – 1.83% to 31/05/2024 | £1,995 | YES | |
| Offset 2 year Tracker – 1.69% (Base + 0.94%) | £1,749 | YES | |
| 2 year Tracker – 1.41% (Base + 0.66%) | £995 | NONE | |
| 2 year Offset Fixed – 1.62% to 28/02/2021 | £999 | YES | |
| 5 year Offset Fixed – 2.04% to 29/02/2024 | £999 | YES | |
| 65% | 2 year Tracker – 1.41% (Base + 0.66%) | £995 | NONE |
| Lifetime Tracker/Variable – 2.10% | £950 | NONE | |
| 75% | 2 year Fixed – 1.59 to 02/05/2021 | £999 | YES |
| 3 year Fixed – 1.79% to 30/04/2022 | £999 | YES | |
| 5 year Fixed – 1.94% to 30/04/2024 | £999 | YES | |
| Residential – Interest Only – sale of property as a repayment vehicle | |||
|---|---|---|---|
| LTVs | Rate | Arrangement Fee | ERC |
| 75% all interest only | 2 year Fixed – 1.52% to 30/06/2021 | £1,499 | YES |
| 5 year Fixed – 1.83% 31/05/2024 | £1,995 | YES | |
| Offset Tracker 2 year Tracker -1.69% | £1,749 | YES | |
| High LTV 1st Time Buyers – Repayment | |||
|---|---|---|---|
| LTVs | Rate | Arrangement Fee | ERC |
| 85% | 2 year Tracker – 1.52% (Base + 0.77%) | £999 | YES |
| 2 year Fixed – 1.57% to 30/06/2021 | £1,499 | YES | |
| 5 year Fixed – 2.04% to 30/06/2024 | £1,499 | YES | |
| 95% | 3 year Fixed – 3.89% to 31/01/2022 | £0 | YES |
| Buy to Let Rates *Average rental cover 145% at 5.5%. | |||
|---|---|---|---|
| LTVs | Rate | Arrangement Fee | ERC |
| 60% | 2 year Fixed – 1.49% to 30/04/2021 | £1,995 | YES |
| 3 year Fixed – 1.83% to 01/05/2022 | £1,995 | YES | |
| 5 year Fixed – 2.02% to 30/04/2024 | £1,995 | YES | |
| 2 year Tracker – 1.44% (Base + 0.69%) | £1,995 | YES | |
| 75% | 2 year Fixed – 1.58% to 01/05/2021 | £1,995 | YES |
| 3 year Fixed – 2.19% to 30/04/2022 | £1,999 | YES | |
| 5 year Fixed – 2.39% to 31/03/2024 | £1,995 | YES | |
| 2 year Tracker – 1.99% (Base + 1.24%) | £950 | YES | |
| Second Charge, Bridging Finance, Equity Release Loans available – rates upon request |
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