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13/06/2017 - Live by the beach... in London! 13 Jun 2017
08/06/2017 - Election causing buyers and sellers to "wait and see" 08 Jun 2017
06/06/2017 - More lenders target small-deposit buyers, just as house prices slide 06 Jun 2017
02/06/2017 - House prices show longest sustained fall since 2009 crash 02 Jun 2017
01/06/2017 - Apps for surveyors: 2017 edition 01 Jun 2017
22/05/2017 - Conservatives plan to bring back Home Information Packs 22 May 2017
15/05/2017 - Revealed, the least affordable places in Britain to buy a property: 15 May 2017
08/05/2017 - House price growth stagnates in the UK, latest index shows 08 May 2017
06/04/2017 - Dramatic scene after house collapses in affluent street in Kingston 05 Apr 2017
28/03/2017 - Borrowers urged to fix their mortgage fast as rising inflation could soon spell the end of super low interest rates 28 Mar 2017
22/03/2017 - House prices see 1.3% monthly surge 22 Mar 2017
09/03/2017 - UK property market growth continues to rise modestly apart from in London 09 Mar 2017
24/02/2017 - House prices go potty! 24 Feb 2017
09/02/2017 - How the Government's Housing White Paper plans will affect you 09 Feb 2017
08/02/2017 - How to flood proof your home: We visit 'Resilient House' with latest defences to help protect against expensive water damage 08 Feb 2017
30/01/2017 - Homeowners taking advantage of cheap remortgage deals 30 Jan 2017
25/01/2017 - Analysis: Stamp duty is killing the housing market and harming the economy 25 Jan 2017
11/01/2017 - Mapped: Which London neighbourhoods have seen the biggest house prices rise since the crash? 11 Jan 2017
09/01/2017 - January sees largest fall in BTL products since 2009 09 Jan 2017
04/01/2017 - 'Thousands' of Starter Homes to be built in 2017 04 Jan 2017

News.

28/03/2017 - Borrowers urged to fix their mortgage fast as rising inflation could soon spell the end of super low interest rates

Plummeting fixed rates look set to trigger a mortgage price war. But borrowers who are tempted by deals as low as 1 per cent or less are being urged to act fast as rising inflation – up to 2.3 per cent last week – could soon spell the end of super low interest rates.

If the Bank of England decides to put up rates to control inflation such cheap deals will vanish. There are big savings to be made for those who switch now. 

But beware, as many of the keenest fixed rate deals charge fees of hundreds or even thousands of pounds to set up the loan – and demand high deposits or equity.

On the up: Rising inflation could spell the end of cheap home loans
On the up: Rising inflation could spell the end of cheap home loans

BELOW 1 PER CENT

Yorkshire Building Society’s new two-year fixed rate of 0.99 per cent – available to those with at least 40 per cent equity – puts rates back at their historic lows.

HSBC offered a two-year fixed rate at 0.99 per cent last year but it was withdrawn in December. Since then fixed rates have been creeping steadily upwards. But now more lenders are expected to follow Yorkshire’s lead and trim fixed rates.

It is vital to do the sums before taking the plunge. David Hollingworth, at broker London & Country Mortgages in Bath, Somerset, says it is great news for borrowers, but it is important to calculate the total cost of any new mortgage.

Yorkshire’s rate is low but it charges an arrangement fee of £1,495. There is also no help with other remortgage costs, such as the property valuation and legal fees.

Hollingworth warns that for borrowers with smaller mortgages the savings made by switching to the low fixed rate could be wiped out by charges. He says: ‘Depending on your circumstances it may be better to opt for a deal with a higher rate but lower fees.’

COSTS ADD UP

Even with a fairly sizeable £150,000 repayment mortgage over 25 years, Yorkshire’s 0.99 per cent fixed rate is not the cheapest option once you factor in all costs.

Over two years a borrower would pay £13,550 in monthly repayments, including capital and interest. Adding in the arrangement fee and typical legal costs of £300 and a valuation of £270 this takes the total cost of the mortgage over the two-year period to £15,616.

 
By contrast, if the same borrower opted for a 1.65 per cent two-year fixed rate with Barclays, which carries no set-up fee, has a free valuation and free legal work, plus £200 cashback on completion – the total cost over two years would be £14,453 – more than £1,000 less.

The borrower would need at least 50 per cent equity to be eligible for the Barclays deal and more of the capital would be paid off with the Yorkshire mortgage over two years.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: ‘High fees aren’t always to be avoided, it just depends on the size of your mortgage. You can add fees to your loan if you don’t want to pay upfront, although you will pay interest for the life of the loan.’

HIGH DEPOSIT, LOWER RATE

The lowest fixed rates are reserved for those with chunky equity in their property – typically at least 40 or 50 per cent. But this does not mean those with less equity – or cash deposit for homemovers and buyers – cannot bag an attractive deal.

For example, a borrower with just ten per cent equity in their home will find Hinckley & Rugby Building Society offers a two-year fixed rate at just 2.29 per cent. There is no fee and also a free valuation and free legal work on the remortgage. This is much lower than standard variable rates which average about 4.5 per cent.

FIX FOR LONGER

With the uncertainty of Brexit many borrowers will want to lock in to low fixed rates for longer than two years. It is possible to grab a deal at 1.7 per cent fixed for five years with Barclays with a £1,499 fee if you have at least 40 per cent equity in your property – or a rate of 2.4 per cent with a £199 fee with Leeds Building Society if your equity is 25 per cent.

'We went for a two-year deal' 

Property development manager Nathalie Thompson, 33, and her husband Stuart, 35, an architect, were keen to keep down their loan costs with a fixed rate.

Nathalie Thompson and husband Stuart pictured with their 18-month-old son Oliver
Nathalie Thompson and husband Stuart pictured with their 18-month-old son Oliver

They acted swiftly when their previous fixed rate loan came to an end in January and secured a new two-year deal at 1.29 per cent with Halifax. There was a £999 arrangement fee.

The couple like the predictability of payments with a fixed rate. Their Victorian property in the Newbridge area of Bath, Somerset, has risen in value since they bought it in 2012 and they now have about 25 per cent equity.

Nathalie says: ‘We looked at fixing for longer than two years. But the two-year rates were so competitive we decided to make the bigger savings now and risk that rates won’t rise considerably before we need to remortgage.

‘We felt the Halifax deal offered a good combination of low rate and reasonable set-up fee.’

Source: www.dailymail.co.uk 28/03/2017