Could lower deposit mortgage rates soon rise?
Since Yorkshire Bank Group increased its lower deposit mortgage rates, there has been growing concern that smaller deposit buyers could soon be hit by market-wide rate increases as more lenders follow suit and hike their rates too.
Following on the heels of Yorkshire Bank lenders such as Barnsley, Chelsea, Norwich and Norwich & Peterborough, was an announcement from Aldermore advising its rates had gone up too. The lender recently raised its 95% LTV Help to Buy mortgage rates, with a 2 year fix now on offer at 5.43%
So far other lenders have kept their 2 year rates low, however 3 and 5 year rates from a few lenders such as Barclays, Metro Bank and Hinckley and Rugby have gone up.
The prediction is 3 and 5 year fixed rates may rise further over the coming months, while 2 year fixes are likely to stay the same.
The Help to Buy scheme is to run until 2020 and interest rates are likely to stay low until 2015, so at present the news is positive for lower deposit buyers, especially those looking for a 2 year fix.
It remains true that the larger the deposit you have the lower the rate you can achieve, so to get the very best deal it pays to come up with as large a deposit as possible when buying a home.
The advice is to get yourself a deal now while rates are low, as after the new MMR rules come in on April 26 you might find it a little more time consuming and challenging to get a deal.
For impartial advice and a low rate quote,
call 0800 048 8828.
