08 Sep Mortgage rates
Mortgage Rates
With interest rates been dramatically dropped, what does this mean for the mortgage market?
It all sounds good on paper, however, what does this mean to you, if you are trying to buy or sell a home? With interest rates going down it means that banks and lenders should be that little bit more keen to lend. Which they are, however with interest rates going down mortgage rates seem to have gone through the roof. The fees for borrowers are close to a £1000 which is an increase of 9.1% over the past few years according to Moneyfacts. So where are these rising fees coming from? Well, it’s a way for the Banks/Lenders to claw back some of their profits. This is because a fee for a typical mortgage rates moves up and down with the rate of the Bank of Englands base rate. This as we all know currently stands at 0.25%, The lowest ever. The cost of a tracker mortgage? Well, this has now gone up £39, figure that out!
So how about the number of mortgage approvals, surely they have gone up? Unfortunately, they haven’t.Figures show that the mortgage approvals have hit and 18 month low. This is probably down to Brexit. We have seen many people scared to move onto, up or even down the ladder until the market shows signs of stability. But when will this be? When will the UK trigger article 50 and will this help or just create further chaos? It’s all the unknown. You could opt for a lower initial fee but it would mean paying more in the long run, so it seem’s it’s a bit of a lose, lose situation.
Many reports say that we as a nation of buyers and sellers are still losing confidence with the aftermath of Brexit.
Equifax Touchstone is one of the UK biggest processing firms with over 70% of the mortgage application processing fees and they are down just on sales over 15% from the previous month.
Now this could be down to the normal ‘summer slowdown’ as we here at Home House Buyers call it. July to September seems to always take a hit due to people being on holiday or parents not haveing the time with their kids being off school. However, if we go on a year on year basis , sales are down 16%, which speaks volumes.
According to Equifax, residential sales have fallen by 15.8 percent and buy-to-lets have also have fallen by a similar amount. Year on year residential sales have gone down by just under 10% and with the new Buy to let issues they have slumped down by just under 40%.
For us here at Home house Buyers the most testing time for those looking to ‘sell my home fast’ will be the housing market over the last quarter of the year. The change in stamp duty has also seen things slump to a level close to a 3% dip. It seems to us that the housing market is getting squeezed from every angle. These figures could also be distorted as many Buy to Let investors pushed their sales through before the April cut-off to avoid the tax implications.
So for those on the market trying to sell my home fast then what should you look to do? Well, the answer from most estate agents would be to just drop the price. Is that the right thing to do? If people aren’t achieving sales then will dropping the price just devalue your stock? Many estate agents would argue that if you drop the price then it will increase your potential of getting a sale. It will make their job easier, that is a fact. But unless people are buying cash (which most aren’t) then you could still be stuck in the same position.
As a homeowner one of the biggest issues that you should be looking at if you are on a tracker mortgage is trends. ‘What do you mean?’ I hear you ask? Well, the interest rate is at a record low but what if it changes? Go back just ten years and the interest rate was at 5% so what if it went back up what would that mean to your mortgage payment. Well if your lending was £300,000 on a tracker currently then your mortgage payments might be £1000 a month. Now, if the interest rate changed then that would shoot up to £1734 per month. How would that increase affect your household? If you go back to 1990 then the rates were at nearly 14% , this would put your mortgage rates bills up to £3600. Ok, we hear you ‘but that was 25 years ago’, correct. However with most mortgages being 25-40 years at some point the interest rate has to rise, it’s just a case of when and how much.
As cash buyers, Home House buyers can offer you a sell my home fast service. Our sell my home fast service is unique as we can offer you a guaranteed cash price on your property withing a matter of days and we cover all of the fees. We pay for solicitors, survey cost and we even cover the cost of the energy performance certificate. Most high street estate agent will charge you between 2-3% + VAT for the sale of your house. This is money that you could directly save by using a sell my home fast service.
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