15 June 2017

LENDERS TARGET THOSE REMORTGAGING WITH ROCK-BOTTOM RATES

A HUNG PARLIAMENT MAY HAVE BEEN THE UNEXPECTED OUTCOME OF THE GENERAL ELECTION BUT THE GOOD NEWS IS THAT IT HAS NOT HAD A NEGATIVE IMPACT ON THE MORTGAGE MARKET. SWAP RATES – WHICH ARE USUALLY LINKED TO THE PRICING OF FIXED-RATE MORTGAGES – HAVE NOT RISEN IN RESPONSE TO THE RESULT.

We don’t expect to see a great deal of change either with Theresa May forming a government and carrying on. There is less reliance on the Swaps market anyway, with some lenders still accessing cheap funding via the Term Funding Scheme and others lending the cash they are attracting via ‘best buy’ savings rates

So on the lending front it is very much business as usual with lenders keen to lend and the oversupply of money set to keep mortgage rates competitive for the foreseeable future.

Data out from the Council of Mortgage Lenders this week reveals that demand from landlords remains muted as investors get to grips with tax changes and higher stamp duty. But first-time buyers and those remortgaging are making hay while the sun shines in terms of taking advantage of cheap mortgage deals.

There has been a lot of re-pricing downwards on mortgage rates, with Accord, Virgin Money, Platform, New Street and Tesco all cutting in the past few days. With transaction levels in the housing market muted, the chase for volume falls on remortgages so we are seeing a number of remortgage-only products priced more keenly than their purchase equivalents.  Now is therefore a very good time to remortgage, particularly if you are sat on your lender’s standard variable rate.

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