Page 12 - Musker McIntyre

Borrowing more to
Preparing for
climb on ladder

First-time buyers have been driving the
mortgage market forward in the past year,
the rate rise
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
borrowed 3.3 times their annual salary on

average in 2013 compared with 3.26 in 2012.
Predictions for next spring ‘about
The number of loans made to irst-time
buyers was up by 23 per cent in 2013
compared with 2012, but on average these right’, reports Duncan Farmer
borrowers still needed to ind a 20 per cent
It now seems highly likely However, the ixed-rate mortgage
deposit. The total number of loans to irst-
time buyers reached 268,800, which was that the Bank of England market is confused with some lenders
44 per cent of all home loans advanced will raise interest rates raising their rates even though swap
for house purchases in 2013, and was the next spring – a year from rates, the rate at which borrowers lend to
highest proportion since the turn of the new now – because wages are
each other, are falling. This is particularly
millennium. However, the total amount of rising at or slightly faster than inlation. One obvious in the ive-year market. Ray

money borrowed by homeowners last year member of the Bank’s Monetary Policy Boulger, of broker John Charcol believes
was still less than half of that seen at the peak Committee, which sets rates, came up this is because increased demand from
of the housing boom in 2007.
with the April date in a television interview borrowers is putting stress on lenders’
and Mark Carney, the Bank’s governor, admin departments, and their response
Flood banks support
agreed the date was ‘about right’.
has been to make some products less

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

Current Best Buy Mortgages
Fixed Rates
Source: Charcol Ltd 0800 718191 www.charcol.co.uk
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.

www.muskermcintyre.co.uk