Has a price war between lenders created the best mortgage deals ever?
A pricing war may have started among lenders offering the best mortgage deals. Deal Direct are seeing more low rate deals being offered by lenders in an attempt to kick-start the UK's housing market. Rates for both 5 and 10 year fixed rate mortgages have dropped to lowest levels ever.
The Chelsea Building Society launched a 5 year fixed rate mortgage at 3.19 per cent which is the lowest rate since records began. However, to be accepted for the deal borrowers need either a 30 per cent deposit or 30 per cent equity in their home, a £1,495 fee will also be applied.
The Norwich & Peterborough Building Society who launched one of the best mortgage deals for a 10 year fix in January, pulled their offering 2 weeks later citing the reason for withdrawal as ‘unprecedented demand’.
New deals are being introduced by lenders as Land Registry figures reveal house prices fell by 1.3 per cent in 2011. Many economists are expecting prices to continue to drop in 2012 as cautious buyers are discouraged by a weak economy and rising unemployment.
Market experts predict that although the BOE base rate will not rise for at least another year mortgage rates will increase. Borrowers could protect themselves now by finding the best mortgage deals offered for a fixed rate. For those not wanting to fix there are more risky tracker options available, such as a lifetime tracker from HSBC offered at 1.99 per cent above base.
Contact Deal Direct and let us search the whole UK mortgage market for you.
