As forecast in our press release of 14th January, mortgage lenders are now starting to pass on to the consumer, the reduction in the cost of funding fixed rates. In the first few days of this week alone we have seen more than 10 lenders reduce their fixed rates, with new market leading schemes being announced in all the most popular sectors of 2, 3 and 5 year fixed rates.
For homeowners whose fixed rate is coming to an end, and who are looking for some peace of mind, this is great news as it closes the gap between their existing scheme and those currently available. First time buyers will also be encouraged as some of the biggest reductions have been in the fixed rates available to those with only a 5% deposit, hopefully putting home ownership within the reach of more potential buyers.
Cheltenham & Gloucester, Bristol & West, Woolwich and Halifax are a few of the big names to have announced reduced fixed rates and for the first time in approximately 6 months, borrowers will have access to both 2 and 5 year fixed rates below 5%. Best Buys
The question that may be on many people’s lips is whether to commit now or wait and see if rates fall further, and the answer will not be the same for everyone. If you are purchasing and have exchange deadlines to meet, or your existing scheme is coming to an end soon, you will not have the luxury of being able to wait, whereas if you have 3 months or more before your existing scheme ends, then you may be able to sit tight and see how things develop. Even if you do have the time to postpone making a decision, it can still be a high risk strategy if rates go against you, so making a decision early and using L&C’s ratecheck service may be the most prudent decision.
Ratecheck is a service provided to L&C’s clients where once the mortgage offer has been received, L&C will research the whole of the market again to ensure that it still offers the best value.