Due to the Covid-19 pandemic, I would say it’s a pretty safe bet that people are going to be concerned about what the future holds for the financial market.
This is completely understandable. However, a positive that has come out of the coronavirus crisis is that the Bank of England lowered the base rate to 0.1% back in March 2020. In August 2021 it was confirmed that the Monetary Policy Committee voted unanimously to maintain this rate. This has led to record low mortgage rates, as the banks and building societies have reflected this reduction in their rates as well, meaning borrowing against your property could cost less than other types of borrowing.
Whether looking to buy your first home, next home, or remortgage your current home, using an Independent Broker could save you thousands of pounds. We will look at the market as a whole meaning that we compare rates from all different lenders to make sure you are getting the best deal out there.
Your bank, meanwhile, can only offer you their products. Other brokers may be limited to a restricted panel. Therefore, there is no better time to get in touch with your local independent broker to see if we can save you money.
Whilst these record-low rates are appearing across the market, it is still important to remember that these are more common for lower loan to value (LTV) products.
The loan to value is the percentage value of your mortgage amount in comparison to the value of your property. For example, if your property value is £250,000 and you have a mortgage balance of £200,000 then your loan to value is 80%. Typically, the higher the loan to value, the higher the rate of interest you will pay.
In pre-pandemic times, there were a wide variety of lenders offering 95% LTV mortgages. At the beginning of the pandemic in March 2020, the mortgage market restricted lending to around 60% LTV. Since then, backed by Government assistance, and of their own accord, lenders have been slowly re-introducing higher LTV products very cautiously.
As there are now less products available at these higher LTV levels, it is even more important to ask a broker to assist with comparing the market to ensure that, despite the higher interest rate levels, you are still paying as little as possible.
An article in The Express estimates that around 800,000 borrowers have been paying their lender’s Standard Variable Rate (SVR) for more than six months and that this equates to each borrower paying around £2,300 more per year than the average mortgage deal. If you are one of those borrowers, I would strongly recommend that you get advice from a mortgage broker as soon as possible to find out if you could be paying less each month. The value of your house may have increased meaning your LTV decreases and you could be benefitting from the record low rates mentioned above!
Contacting us here at Prospero Finance couldn’t be more simple. We can communicate with you via email, telephone, video conference, or in person if desired.
Give us a call today on 01793 977790 or email firstname.lastname@example.org to start your journey to saving money.
Mortgage & Protection Adviser