The Nationwide house-price index for October reveals that half of all borrowers are taking out five-year fixed-rate mortgages. There are two reasons for this – the first is that borrowers are worried about a potential rate rise because of the uncertainty surrounding Brexit. And secondly – and perhaps even more of a reason – the price war among lenders means that these rates are so competitive that they are almost too good to turn down. With five-year fixes starting from sub-1.5 per cent, this really is an incredible rate for medium-term security.
Nationwide also revealed that house price growth remained subdued in October, which comes as no real surprise. While Brexit uncertainty continues, some people are reluctant to make big decisions about moving home unless they absolutely have to. It is hard to see how this will change until there is more certainty and some resolution politically, either way. In the meantime, those who are willing to move may well find that property prices have fallen in the area in which they are looking, making that move a little bit more affordable. With mortgage rates as low as they are, and showing no sign of rising anytime soon, it could present an opportunity.
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