New mortgage rates are the LOWEST EVER: 2-year fixed rates have dropped to 0.95% and 5-year fixed rates to 1.17% (although in some cases they add value in the form of huge fees).
Cause? The perfect storm …
- Ultra-low interest rates in the UK
- Home buying boom fueled by declining stamp duties
- Banks with surplus cash for loans as many people have accumulated savings during the pandemic
The result is fierce competition for credit Best clients. This means that for some, re-collateral – switching a deal without moving property – can lead to phenomenal savings. Martin Evans tweeted: “@MartinSLewis I was lucky to be able to work from home during the pandemic. I managed to refund the deposit, and my payments £ 150 per month cheaper… “ Saving £ 1,850 per year.
And yet, while at first glance this looks like a boom time for mortgage holders, you don’t have to be Bob Geldof to smell a rat. Getting a super cheap mortgage isn’t easy, especially if you’ve got Covid backing. So my goal is not just to show you “the cheapest mortgage” – I am really talking about “the cheapest mortgage you can get.”
Delays are common now – act on time to avoid moving to SVR
The deadline for state fees and the home buying boom mean that brokers, lenders and property transfer lawyers are in huge demand. This means that it now takes more time, sometimes even months.
Beware of those with fixed or discount deals ending this year. When they run out, you usually end up with lenders’ much more expensive standard variable rates (SVR). To avoid this, you need to start earlier than usual, three to six months before it ends, especially if you are self-employed or have difficult circumstances.
This article was originally written by MoneySavingExpert founder Martin Lewis for our weekly email Wednesday June 16th.