Page 12 - Hayman-Joyce

Preparing for
Borrowing more to

climb on ladder

the rate rise
First-time buyers have been driving the
mortgage market forward in the past year,
according to the Council of Mortgage Lenders,
but they have been borrowing more to get on
the housing ladder.
Figures from the council show that they
Predictions for next spring ‘about
borrowed 3.3 times their annual salary on
average in 2013 compared with 3.26 in 2012.
The number of loans made to irst-time right’, reports Duncan Farmer
buyers was up by 23 per cent in 2013
compared with 2012, but on average these It now seems highly However, the ixed-rate mortgage

borrowers still needed to ind a 20 per cent likely that the Bank market is confused with some lenders
deposit. The total number of loans to irst- of England will raise raising their rates even though swap
time buyers reached 268,800, which was interest rates next rates, the rate at which borrowers lend to
44 per cent of all home loans advanced spring – a year from each other, are falling. This is particularly
for house purchases in 2013, and was the now – because wages
obvious in the ive-year market. Ray

highest proportion since the turn of the new are rising at or slightly faster than inlation. Boulger, of broker John Charcol believes
millennium. However, the total amount of One member of the Bank’s Monetary this is because increased demand from
money borrowed by homeowners last year Policy Committee, which sets rates, borrowers is putting stress on lenders’
was still less than half of that seen at the peak came up with the April date in a television admin departments, and their response
of the housing boom in 2007.
interview and Mark Carney, the Bank’s has been to make some products less

governor, agreed the date was ‘about attractive – for now at least.
Flood banks support
right’.
“Therefore the short-term message
The wholesale money markets, which for anyone wanting a ive-year ix is not
Banks have come in for almost incessant are a good indicator of future interest to hang around – rates are only going
rates, suggest that rates will not rise by one way in the short term - but it would
criticism over the past seven years, but now much. In fact, the idea of rates returning not be wise to chase rates up very far,”
perhaps they deserve some plaudits.
After the loods, which left thousands of to their most recent highs of ive per cent says Boulger, who singles out Hinckley &
homeowners and businesses in dire need, is thought unlikely by all but the most Rugby Building Society’s ive-year ixed
many banks and building societies have pessimistic commentators.
rate loan with a rate of 3.55 per cent for
The fact that wages are rising at two loans of up to 80 per cent.
been doing their bit to help. HSBC, Lloyds, per cent means that most people in work Making regular or one-off lump-sum
Nationwide, RBS/NatWest and Santander
have introduced a range of measures for will be able to afford an increase in their payments off your existing loan is also
clients affected by the looding.
monthly mortgage payments, but over the a great way to reduce the burden of
These include payment holidays on loans next 12 months there is plenty borrowers higher rates. Whatever can you pay off
can do to soften the blow of higher your outstanding loan now will leave
and mortgages, extensions to overdrafts payments.
lower balance on which higher rates
or loans, and fast-track applications to help
people pay for emergency repairs while they The ixed-rate mortgage market could be applied next year. Making
wait for insurers to meet their claims.
remains buoyant and competitive, and as regular overpayments will also get
Although the waters did not make it into our best buy tables show, there are plenty you into the habit of meeting higher
central London, it might be worth calling your of loans available now to which borrowers monthly repayments. Most lenders allow
could switch and, almost certainly in the repayments up to a certain percentage of
bank (as well as your insurer) if you are ever short term, reduce their payments, and the loan without penalty.
struck by a similar disaster.
certainly in the long term avoid the worry
of rising rates.

Current Best Buy Mortgages

Source: Charcol Ltd 0800 718191 www.charcol.co.uk
Fixed Rates

Rev. Max. Product Exit
Lender
Rate
Until
Rate
APR
LTV
HLC
ERC
Fee
Fee
Notes

NatWest
1.85%
31/7/16
4.00%
3.9% APR
60%
None
2/1% to 31/7/16. Can repay up to 10% p.a. ERC free
£995
Nil
On remortgages free valuation and free legal fees.
Nationwide
1.99%
2 years
3.99%
3.9% APR
70%
None
3% to last day of month in 2 years. Can repay up to £999*
£90
*FTBs: £499. On remortgages free valuation
10% p.a. ERC free
and free legal fees.
Accord
2.09%
31/3/16
5.99%
5.8% APR
75%
None
2/1% to 31/3/16. Can repay up to 10% p.a. ERC free
£975
£90
Flexible. Available with offset facility at 2.29%.

Leeds
2.19%
30/4/16
5.69%
5.5% APR
80%
None
3/2% to 30/4/16. Can repay up to 10% p.a. ERC free
£999
£199
Skipton
2.89%
31/5/16
5.49%
5.3% APR
85%
None
3/2% to 31/5/16. Can repay up to 10% p.a. ERC free
£495
£125
On remortgages free valuation/legal fees
Hinckley & Rugby
3.79%
2 years
5.64%
5.5% APR
90%
None
Nil
£990
£150
Free valuation. On remortgages free legal fees.

Hinckley & Rugby
4.89%
2 years
5.64%
5.6% APR
95%
None
Nil
£990
£150
Free valuation. On remortgages free legal fees.