Most Borrowers are on SVR

We have been writing about fixed-rate vs standard rate mortgages a lot recently. An editorial by Richard Adams in Mortgage Strategy helps explain why fixed-rate vs. SVR (Standard Variable Rate) mortgages are such a prominent topic – and the reason is simple:

Most borrowers are on SVRs. The number has gone up from 49 per cent in 2007 to 67 per cent this year. Yes – an 18 per cent increase and one which moves the discussion from almost half to comfortably most.

Adams reckons now is the time to seriously consider moving from your SVR to a fixed-rate mortgage.

We agree. It is the perfect time to look at your mortgage rates, and start shopping around with one fact in mind: interest rates are likely to increase.

We help people find the right mortgage – whether it’s to buy a first home, or to move to the best deal on a remortgage.

Give us a call, and we can get started.

Posted in Market Watch, Mortgages, Remortgaging

Limetree on BBC Radio Cambridgehire

James was recently invited to join Andie Harper on his BBC Radio Cambridgeshire Mid-Morning programme. They discussed the impact of tougher underwriting guidelines by Mark Carney and the Bank of England.

This is a topic James has blogged about before, looking ahead – and then reporting as they happened – at possible delays to in-house loan advice as new guidelines came into force.

Limetree has appeared on BBC Radio Cambridgeshire before, and it is always an interesting opportunity to discuss Cambridge’s property and financial market.

You might be able to catch the programme when it becomes available here, though BBC’s listen again feature doesn’t always cover past episodes.

If you have any questions about recent changes lending legislation, give us a call.

Posted in Market Watch

Base Rate Confusion?

Two weeks back, James blogged about the general concensus among economists and financial journalists that the Bank of England will raise its base rate fairly soon. The base rate is what it costs for banks to borrow from the Bank of England, so rising base rate affects lenders’ rates too.

This week, it looks like there is some confusion among commentators. Most of base-rate change speculation has been been based on hints and suggestions from the Bank’s governor Mark Carney. And he now seems to be suggesting that an imminent rise is less likely. And if they do push the rate up, it will be “limited and gradual.”

So, it seems that the immediate less likely to happen immediately. But we’re not sure. Nobody is completely sure.

Chris Williams of Wealth Horizons said:

“Despite its protestations, the Bank of England has significantly overestimated the level of clarity that the market and consumers have on its strategy around interest rates.”

Well, quite.

If base rates remain low, then people might be tempted to stay on variable-rate mortgages such as SVRs (Standard Variable Rate) and trackers. But this is risky. Our advice?

Shop around, and make sure you’re in a good position for when the Bank makes up its mind. For many folk, it’s actually a better idea to fix your rates.

If you’re in doubt, get in touch, and we’ll go through your own financial particulars together.

Posted in Market Watch, Remortgaging

Barclays Says Goodbye to Lifetime Tracker

My colleagues have been discussing the shift in mortgages for quite a while now. Basically, people are not going for variable-rate mortgages these days. So much so that James asked – back in April – whether tracker mortgages are dying.

Well, it looks like some versions of the tracker are on their last legs. This week, Barclays announced that it’s discontinuing its lifetime tracker product, and launching a two-year version.

Why the big shift?

Barclays managing director of mortgages Andy Gray says:

“We have seen a significant number of homeowners favouring our two-year and five-year fixed rate mortgages.

“It is evident that homeowners are looking for certainty with their mortgage payments, opting for fixed rate terms that help to protect their mortgage payments during the period in which we may see interest rates rise.”

The market is following the trend, and we expect it to continue, and our advice? Shop around!

It’s our job to find you the right mortgage product, so drop us a line, and we’ll get started.

Posted in Market Watch, Mortgages, Remortgaging

Probable Base-rate Rise

The Bank of England’s governor, Mark Carney recently said that there is “no pre-set course” for raising the BoE base rate, but lots of economists reckon that the rates will probably rise soon. The base rate is what it costs for banks to borrow from the Bank of England, so rising base rate affects lenders’ rates too.

Back in April, I blogged about the trend for people choosing fixed-rate mortgages above SVRs (Standard Variable Rate). One of the most compelling reasons to fix is in anticipation of rising interest rates. If you fix the terms of your mortgage, rising rates don’t affect you during that term.

At the moment, a lot of people are sitting on the SVR (Dan discussed the SVR here). Many people may be getting a decent deal on their current SVR, but it’s a risky position to be in as rates begin to rise.

When rates increase, the great fixed-term deals out there now will become harder to find, and mortgage repayments will go up. It is a good time to seriously consider moving to a fixed-rate mortgage product if you’re on the SVR, or if your fixed-rate term is coming to an end shortly.

Give us a ring straight away, and we will look at your financial particulars, and make sure you are getting the best deal you can for your mortgage!

Posted in Market Watch, Mortgages, Remortgaging