by Mark Johnston
Stiff competition on the high street has resulted in some fantastic offers, especially for those looking to remortgage. Experts are already signaling that borrowers should be taking advantage of the situation and are advising people to take a look at their current mortgage deal to see if they can save money by switching to a new deal.
Recently www.mortgagerates.org.uk reported what was looking like a price war between banking giants HSBC and Barclays. HSBC had just announced that it was extending its 1.99% offer and all eyes were on Barclays to see how they could counter HSBC’s move.
Well, Barclays has now extended its new mortgage offering and made it more accessible to borrowers by reducing the deposit that was needed by increasing the loan to value (LTV) from 70% to 75%. At the same time the Skipton Building Society revamped their mortgage offering by launching a new range of fixed rate mortgages. Their 5 year fixed mortgage has a loan to value (LTV) of 70% with a rate of 3.98% for remortgages and new house purchases.
Melanie Bien, director of Private Finance, the mortgage broker said: “Remortgaging levels have picked up not so much because borrowers think interest rates are going to rise but as a result of the extremely attractive deals on offer, particularly on trackers,”
Many mortgage brokers are seeing an increase in in the number of households looking for a new deal which is probably a result of the new deals driving prices down in the market. Some broker firms are already seeing large increases in remortgage figure with one leading firm highlighting that remortgage deals have already account for over 50% of their business during the month. Another broker, Countrywide, pointed out that their remortgages had increased by 8% taking figures to 25% of their whole business.
Another mortgage broker highlighted that borrowers were now realising that they could save money by remortgaging on one of the new deals. He went on to say: “It’s definitely worth borrowers doing a review of their mortgage to see what options are now available for them,”
The sudden increase in remortgage applications shows that borrowers moods are changing. Since the drop in interest rates to 0.5%, many borrowers have chosen to remain on their lenders standard variable rate as a way of saving money but these new products mean that its not always the best and most cost effective option.
These new deals include great offers like the Royal Bank of Scotland’s 1.99% tracker which tracks at 1.49% above the current 0.5% base rate. It has a loan to value of 60% so a 40% deposit is required and the fee is £999.
Natwest has a great 5 year fixed rate deal at just 3.75% but requires a whopping 50% deposit as the loan to value is 50%. Some brokers are warning that such deals wont be around for long so borrowers should start looking as soon as possible. A spokesperson said: .“Some of the recent remortgage deals launched by lenders will be engineered to bring about a bit of business before the end of the year, so the rates aren’t guaranteed to stay around,”
Related stories to : More Great Mortgage Deals as Lenders Fight For Customers