With recent indications that interest rates could remain lower for longer, the Sunday Times and Sunday Telegraph discussed the temptation for borrowers to stay on Standard Variable Rates as low as 2.5% rather than switch to a fixed rate, even at current record low levels. Experts were keen to point out that not all homeowners are benefiting from such low rates and may find a mortgage review well worth undertaking. Lenders such as Coventry Building Society continue to launch competitive products however, which could provide the incentive need to move, but anyone deciding to stick with SVR for the time being is advised by brokers to consider overpaying to cushion the blow of future rises and improve their level of equity, thereby allowing access to a wider range of products in the future.
The Financial Times reported that the market is slowly beginning to improve for First Time Buyers, with lenders offering more innovative products to help people onto the property ladder. Brokers warned however that criteria are still tough, and the key problem remains the difficult of raising a large enough deposit. For some groups that problem is partially solved with the help of the Government FirstBuy scheme, and last week the Teachers Building Society were the latest to announce that it would take part, by lending up to 80% of the property value alongside the 20% government equity loan which is interest free for 5 years.