Competition in the UK mortgage market Co-operative banks increased their speed on Friday by launching a record two-year fixed-rate transaction at an interest rate of 0.79%.
Transactions from Platform, a division of the cooperative that lends through mortgage brokers, currently offers two-year fixed rate transactions of less than 1%, following a series of interest rate cuts large-scale lenders. There is also.
The platform’s 0.79% interest rate is limited to borrowers looking for loans below 60% of the house price and has a relatively high fee of £ 1,499. Lenders also offer 0.84% trading with a lower commission of £ 999.
Mark Harris, CEO of Mortgage Broker SPF Private Clients, said: He has billions of dollars in cash and is backed by a clearing bank that is considering lending. “
He added that the fees are an important factor for borrowers to consider in addition to the initial rate of correction. “For large loans the interest rates tend to be low and the fees tend to be high, where you can borrow up to £ 2million,” he said.
Eleanor Williams, financial expert at Moneyfacts, said banks are cutting prices as Britain remains in a low interest rate environment. The Bank of England’s base interest rate has been 0.1% since March 2020.
“The fixed rate war continues in earnest in the mortgage industry, and the average fixed rate is down, as most vendor product updates this week include at least one initial rate cut.” She said.
HSBC, Royal Bank of Scotland, National, NatWest, Barclays, Virgin Money and Leeds Building Society are lenders who cut interest rates on mortgage products this week.
Mortgage repayment activity intensifies as borrowers try to set interest rates low, and some are aware that high inflation can ultimately lead to higher interest rates. Chris Sykes, a private financing consultant for a mortgage broker, said some clients have broken existing transactions to secure long-term transactions at current rates.
“If you can lock yourself into a five-year solution at a rate that saves 0.3-0.4% per annum, it might make sense to pay a 1% early redemption fee,” he said. -he declares. “People want this security. “
Banks have also reopened the door to the self-employed and to borrowers with complex or atypical finances, who constitute the majority of income from premiums and variable costs.
Harris said it was understandable that lenders triggered such loans at the height of the pandemic. Because its economic impact was unknown. “But a lot of people are not financially affected. Banks realize that the big guys make as much money as they always do. “
The reappearance of tracking rate mortgages after the base rate is yet another sign of increased competition in the mortgage market. According to Moneyfacts, the number of tracking products nearly doubled, from 96 in March of this year to 176 this week.
Aaron Strutt, Product Manager at Broker Trinity Financial, gives an example of a 0.85% tracker for two years at Barclays and costs £ 999. “Tracker rates weren’t gone long ago, but they’re back and most importantly cheap.
Cheapest two-year fixed rate mortgage deal launched in UK Source link Cheapest two-year fixed rate mortgage deal launched in UK