Mortgages - Is it time for you to fix?

Is now is the time to fix your mortgage?

Mortgage rates are back on the rise. An improving economy, expectations that rates will rise sooner than the Bank of England suggests, and the scaling back of Funding for Lending has bumped up mortgage costs. But mortgage lenders still have some astonishingly low rates on offer and their increased confidence makes this one of the best times to be looking for a home loan since the credit crunch hit. Certainly, those on SVR or tracker of 2% or higher with reasonable equity in their home should seriously consider fixing. This will safeguard your monthly payments and could save you money or at least keep things equal. Events have highlighted the vulnerability of SVR and discount rates linked with them and if you are on a standard variable rate or have multiple mortgage loans due to further advances in the past you should seriously think about a review.

Are you on a Standard Variable or Tracker rate?

A number of mortgage borrowers have fallen victim to lenders hiking their standard variable rates, despite the base rate remaining stable. Santander & Halifax announced big hikes in their SVR rates last year for new and existing customers. Some RBS, Nat west,Co-op, Clydesdale, Bank of Ireland and Yorkshire Bank borrowers also suffered hikes. Skipton BS did it too when its SVR soared from 3.5% to 4.95%. A number of smaller building societies, including Marsden, Scottish, Cambridge, Kent Reliance and Accord Mortgages, have also raised SVRs since the base rate hit rock bottom. Other lenders like Nationwide have introduced a new SVR of 3.9% instead of 2.5% for new borrowers and remortgages. Previously it was thought that those with larger societies or banks should be safe but the Halifax and RBS moves put paid to that view.

Why a fixed rate?

Fixed rates remain nearer their record lows and things are looking up for borrowers with smaller deposits. Many offer re-mortgaging clients a free valuation and free legal fees, and some lenders have exceptional rates with no arrangement fees.
Rising house prices, renewed bank and building society confidence and an economy on the up mean that competition for homeowners business across the mortgage market has finally taken hold. In fact, borrowers may find it a better move to act now if they want a good deal rather than delay. The new Mortgage Market Review rules demand that almost all mortgage discussions are advised - meaning that homeowners who opt to go directly to the lender rather than through a broker will need to speak to a lenders in-house adviser, potentially bumping up the cost and waiting weeks for a first appointment adding to the time it takes to secure the mortgage.

Breaking news.... Natwest have joined the Halifax capping their income multipliers to a maximum of 4x on larger loans of £500k+.........  

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