Mortgage Market Update
Market Update – We are starting to see some very positive moves by lenders in the last few weeks. Sainsburys have just launched with us (we are just checking if you get a million Nectar points per mortgage!) & NatWest have made a very positive change in their Buy To Let criteria, so if you earn £75,000 or more, you can borrow around 45% more with them (see below for the calculation should you be interested). They are just 2 changes of an increasingly competitive market. So despite the doom and gloom that dominates the press at the moment, our world is looking pretty Rosy as we have more options and improved lender criteria to work with.
(Assuming a rental income of £1,000 a month, the majority of lenders will offer you a loan of £150,470, which is determined by the lenders applying a ‘stress test’ rate of 5.5%, then expecting the rent to cover that figure by 145%. However, NatWest only expect the rent to be 100% of the stressed rate at 5.5%, which equals a loan of £218,182, a significant 45% increase on the same rental income. Please note, the actual loan offered does vary from lender to lender and also your specific situation).
By definition, we work in Financial Services. There is a clue in the title that many people forget about – Service. Therefore, I was very proud to see that we are now one of only a few mortgage brokers in the UK to have over 130 reviews on Google. That makes us one of the top ranked companies in the entire country by both review and score. If you want to find out why, please speak to one of our advisers, so they can explain the more complex side of things like the calculation above, and anything else that your specific circumstances require.
Rate Update – Money markets have been up across the board over the last 2 weeks. On SWAP Rates, 2 year money is up to 1.228% (up 0.13%) and 5 year money is up to 1.491% (up 0.129%). LIBOR is also to 0.866% (up 0.058%) This is relevant as banks largely price their fixed rate mortgages off SWAP Rates, and variable rates off LIBOR. So on that basis, I would start to expect some movements up on rates in the coming weeks if this trend continues.
On both fixed and variable rates, lenders will typically add about 0.5% as a starting point to the rates above to create the mortgage products they offer. However, the rate you will be offered is heavily dependant on your circumstances and deposit/equity level.
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