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Mortgage experts believe there has never been a better time for borrowers to cling to the rock bottom home loan rates
Mortgage experts believe there has never been a better time for borrowers to cling to rock-bottom home loan prices.
In the past few weeks, a spate of new, less than 1 percent fixed rate loans have been launched by companies like TSB and Platform Home Loans. This has led an expert, Peter Gettins of L&C Mortgages, to describe the market as “incredibly competitive”.
He adds, ‘There are some fantastic prizes out there and I don’t think a homeowner would piss himself off in six months if he took advantage of them now.’
Savings: A flood of new fixed rate loans with less than 1 percent was launched
Ray Boulger of broker John Charcol shares this view. He says: “It now seems unlikely that the Bank of England will introduce negative interest rates. With a key interest rate of 0.1 percent, the question is not whether interest rates will rise or fall, but when, how quickly and by how much. So a fixed rate loan seems like the best option. ‘
Nationwide, the largest building society in the country is the youngest lender to offer a loan agreement – but only for existing owners – at less than 1 percent. The two-year fixed-rate loan at 0.99 percent that was launched on Wednesday is available to people with at least 40 percent equity in their homes. It comes with an administration fee of £ 1,499.
Platform’s equivalent two-year fixed rate loan is priced at 0.95 percent, although borrowers with loans less than £ 250,000 would be better off opting for Platform’s 1.05 percent two-year fixed rate loan as the referral fee is £ 500 lower at £ 999.
Although two-year fixed rate loans are cheaper than five- or ten-year fixed rate loans, experts believe that most borrowers would choose a five-year fixed rate loan.
Boulger says, ‘The best 5-year fixed rates are only slightly higher than the best 2-year deals. By fixing for a longer period of time, a borrower not only secures a low interest rate for a longer period of time, but also avoids the costs of switching in two and four years. ‘
For homeowners with at least 40 percent equity in their homes, NatWest, Platform, TSB and Santander all offer five-year fixed-rate loans at less than 1.2 percent.