Competition in the mortgage market has been heating up recently, and the financial press were keen to highlight new figures that reveal the ever-shrinking margin between average 2 and 5 year fixed rates – the narrowest it’s been since 2013 in fact.
Lenders are in a race to attract borrowers ahead of a possible interest rate rise, and several have already cut rates. The Financial Times reported that 5 year fixed rates accounted for 47% of remortgage activity in April, as homeowners look for longer term protection against fluctuations in their payments. The good news is that these cuts are being made across the board, so even those with small amounts of equity could benefit.
The Sunday Express also picked up on changing criteria as lenders fight to win business and revive a subdued housing market. Banks and building societies are lending at higher loan-to-values, and some big names have increased their maximum income multiples, while others have improved their offerings for groups such as older borrowers or the self-employed.
For homeowners concerned about rising rates, experts in the Mail on Sunday advised reviewing their options now to find out if they are paying too much. Moving from a Standard Variable Rate to a fixed rate could result in significant savings, and protect borrowers against rising costs.
What the papers said about a competitive summer and sizzling rates