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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.
2-year fixed rate mortgage launches at 0.95% as the competition hots up
This Wednesday, the 2nd of June, Platform will be launching a market leading 0.95% 2 year fixed rate, a further fall in the 2-year fix which we predicted in our recent memo. However, this has come out faster than we initially expected, having thought previously that lenders would slowly bring rates down to compete with TSBs and Hinckley and Rugby’s 0.99% rate it looks like we have a new competitor in the space pitching for market share. It is likely that this product will come with a £1,499 fee and only be for the highest of quality business at 60% loan-to-value or below and potentially have a minimum loan size (likely £350k+).
95% LTV rates coming down with government guarantee scheme in full swing
Good news for first time buyers as the 95% LTV space becomes increasingly competitive. When rates were initially introduced they were around the 4% mark with many lenders not doing 2 year fixed deals. However, the best available rate in the market is 3.39% on a 2-year fixed term with other options around the 3.5% mark, with many more 2-year deals on offer than previous. Lenders are taking little risk on this product with the vast majority now backed up by the governments mortgage guarantee scheme so fighting for this business makes sense.
Purchase business remains strong
May was another strong month for new purchase mortgage business for us, outstripping any other business type including remortgaging. This shows how strong demand is in the property market currently, despite the end of lockdown, which we believe may cause demand to subside considerably as people enjoyed their new found freedoms. These figures are boosted by a large increase in BTL purchases, as well as second homes and holiday lets. We suspect the “race for space” as it has been dubbed by some commentators will subside and that city centres will see renewed demand in the coming weeks and months.