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Competition in the UK Mortgage market Co-operative banks raised their gear on Friday as they launched a record two-year fixed rate transaction at a 0.79 percent interest rate.
Transactions from Platform, a division of the co-operative that lends through mortgage brokers, currently offer two-year fixed rate transactions of less than 1%, following a series of interest rate cuts from high street lenders. There is also.
The platform’s 0.79% interest rate is limited to borrowers seeking loans below 60% of the real estate price and has a relatively high fee of £ 1,499. Lenders also offer 0.84% trading with a lower commission of £ 999.
Mark Harris, CEO of Mortgage Broker SPF Private Clients, said: It holds billions of dollars in cash and is backed by a clearing bank that is considering lending. “
He added that fees are an important factor for borrowers to consider in addition to the initial rate of correction. “For large loans, interest rates tend to be low and fees tend to be high, where you can borrow up to £ 2m,” he said.
Eleanor Williams, a financial expert at Moneyfacts, said banks are lowering prices while Britain remains in a low interest rate environment. The Bank of England’s base interest rate has been 0.1% since March 2020.
“The fixed rate war is going on in earnest in the mortgage sector, and the average fixed rate is declining as most of the product updates from providers this week include at least a reduction in initial rates.” She said.
HSBC, Royal Bank of Scotland, National, NatWest, Barclays, Virgin Money and Leeds Building Society are lenders who have cut interest rates on mortgage products this week.
Mortgage repayment activity is intensifying as borrowers try to fix low interest rates, and some are aware that high inflation can ultimately lead to higher interest rates. Mortgage broker private finance consultant Chris Sykes said some clients broke existing transactions to secure long-term transactions at current rates.
“If you can lock yourself up in a five-year fix at a rate that saves 0.3-0.4% per year, it might make sense to pay an early redemption fee of 1%,” he said. “People want that security.”
Banks have also reopened the door to self-employed and borrowers with complex or non-standard finances who make up the majority of the income from variable bonuses and fees.
Harris said it was understandable that lenders released the shutter for such loans during the heyday of the pandemic. Because its economic impact was unknown. “But many people aren’t financially affected. Banks are aware that big guys are making as much money as they always are.”
The re-emergence of tracker-rate mortgages following the base rate is a further sign of intensifying competition in the mortgage market. According to Moneyfacts, the number of tracker products has almost doubled from 96 in March this year to 176 this week.
Aaron Strutt, Product Director of Broker Trinity Financial, gives an example of 0.85% tracker for two years with Barclays and costs £ 999. “Tracker rates haven’t disappeared much long ago, but they’re back and especially cheap.”
Cheapest two-year fixed-rate mortgage deal launched in UK Source link Cheapest two-year fixed-rate mortgage deal launched in UK
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