Last year was a great time for those looking to remortgage. Five-year fixed rate deals proved the most popular as people looked to ride through the economic instability caused by uncertainty over Brexit. We also saw some innovative products come to market such as the first 15-year fixed rate deal for a decade, offered by Virgin Money, and by the end of the year 10-year fixed rates hit a record low. So, will the trend for lower and longer fixed rate deals continue?
Forthcoming changes at The Bank of England along with the start of the transition period following the UK’s withdrawal from the EU will still render the economy liable to a period of unsteadiness. End of year figures show the economy only grew slowly towards the time of the general election and there have been calls for the Bank of England to drop interest rates.
A drop in interest rates may create a window for some new 2-year fixed rate mortgage deals as lenders look to attract new customers. We may also see an increase in lending multiples following the lead from Barclays last year who upped their criteria to five times annual income for those earning over £30,000. This was quite a significant move bucking Bank of England rules which only allow lenders to secure such loans to 15% of this ‘risky’ group. Continued high house prices, however, make this a much-needed move for many customers.
A continuation in high house prices also affects the likely age first time buyers will take their initial steps onto the property ladder and as such mortgage terms of up to 40 years are becoming more common. Alongside this there will most likely be a move to raise the upper age limit for borrowers.
All this spells good news for those looking to obtain a mortgage or looking to remortgage this year but it also comes with a warning. Although initial rates may look tempting, upfront fees and early repayment charges need to be taken into consideration within your calculations. If your current deal is due to end within the next six months and you are looking to change, please contact us as we will be able to look at the details.
Speak to one of our mortgage specialists to discuss your mortgage or remortgage on 01564 791 120 or click here to arrange for someone to give you a call at a time that suits you.
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