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October 2014 Newsletter – Opportunity Knocks

October 27th, 2014 Posted in Monthly Newsletters

Opportunity Knocks

Now that the changes brought about by the Mortgage Market Review have bedded in, the Bank of England expects mortgage availability to rise in the months leading up to Christmas. For some borrowers, this will mean product rates of under 2%, albeit for those with large deposits available. But although cheaper rates for low LTVs have always been the norm, there is a definite flurry of low product rates becoming available for higher LTVs. This is despite expectation of a rise in the Bank of England’s base rate at some point in 2015.
Those looking to switch lenders before the festive season begins will also find deals of around 2%, with remortgage rates being some of the most attractive. With this rate war allowing borrowers the possibility of locking into a five-year deal at below 3%, it is therefore surprising that the market is experiencing a slight slump in remortgages. Lloyds Bank, Britain’s biggest lender, has said that the proportion of borrowers remortgaging fell 8 percent in the first half of 2014, compared to the same period in previous years.
The new affordability rules may explain why some have been reluctant to remortgage, causing concern with changes in criteria. This reluctance from borrowers has coincided with lenders themselves adjusting to the changes, resulting in an understandable dip in remortgages.
Despite lenders offering some of their lowest ever rates to borrowers leading up to Christmas, it is a window that may not remain open for long. In fact, one lender recently launched a six-year remortgage deal at less than 3 percent, withdrawing it only days later. This early winter period is therefore a good time to take advantage of these deals, before lenders increase their rates in preparation for the Bank of England’s inevitable change.

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