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This is our take on what is currently happening in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.
The rate war continues…
Halifax have recently entered the battle for the best 2 and 5-year fixed rates on offer, following Nationwide’s market leading offering becoming available last week. The difference is not huge, a fall of 0.01% in both the 2 and 5-year mortgage types, but it does mean the best rates on offer are 0.90% and 0.98% respectively and it marks a continued battle between the major high-street lenders to have the best offering in the market.
Self-employed criteria gradually returning to pre-Covid policy
Self-employed borrowers were one of the hardest hit by the pandemic as lender tightened restrictions significantly. However, as we have emerged from the crisis with the economic outlook, not as bad as expected due to huge government stimulus packages we have been seeing a slow return to the status quo. The most recent is Metrobank who have opened up their criteria and returned to their pre-Covid policy of using before tax limited company profit calculations, rather than after tax.
Proportion of new mortgages at high loan-to-income increases
With house price rises at record levels, it is no surprise that borrowers are needing more money to purchase the home they desire, and this extra borrowing is only made affordable on account of the incredibly low rates on offer in the market. Only 6% of all the loans granted in the first quarter of this year were at an LTV of 90% plus, this was naturally curbed by the high rates lenders were offering in this bracket and thus the high cost of borrowing and we have seen a significant rise in 90% LTV enquiries as rates have fallen. However, the proportion of new mortgages at loan-to-income rates at 4.5 x plus have increased to 10.4% from 9.5% a year earlier, edging towards the 15% limit imposed by the regulators (Bank of England, Bloomberg).