Some really exciting new mortgage products have been launched over the last week. You could even go as far to say the lenders are pretty confident that rates are not going to be fluctuating any time soon. One article I saw had a spokesperson from moneysupermarket.com suggesting the likelihood of Bank Base Rate being cut by 0.25% is greater now than it has ever been! Great for the consumer! Not so great for getting money moving around the mortgage markets!
SWAP rates (the mechanism through which lenders can acquire a fixed price for funding over a specific period of time) have reduced over the last few weeks. The cost of 5 year fixed monies currently resides around the 1.80% mark. The Lender then provides the product to you, the customer, at rates currently in excess of 3%. In comparison, 2 year fixed rates monies stand around 1.20%.
As a result, we’ve seen a number of long term fixed rates launched over the last few weeks and the one causing great excitement (as I write) is from Coventry for Intermediaries who are offering a 2.99% fixed rate available for 2,3 or 4 years. The lenders fees range from £200 to £1800 and can be added to the loan. The lender also offers one free property valuation and free legal costs on remortgages, so keeping the cost of changing to them at a minimum. Five year fixed rates have also reduced with some lenders offering rates as low as 3.39%.
House price commentary continues to make headlines as rightmove.co.uk report a decrease of 0.1%, despite property transactions increasing by 5% in July. This is in line with Zoopla.co.uk who suggests that two in five, 39% of all properties currently for sale, have had their asking prices reduced at least once since coming on to the market. And Investec Specialist Private Bank reported a 10% increase in high valued properties during the second quarter of 2011, with over 21 thousand properties up for sale valued at £1m and over.