Mortgage Lender Products obtainable Hit New Low
Moneyfacts has revealed the number of mortgage products offered by mortgage lenders for new borrowers is at its lowest value since the start of the credit crunch. One year ago 10,726 mortgage products were obtainable to new borrowers; last Friday only 3,281 products were obtainable according to the financial website Moneyfacts. In July last year when the market was buoyant you had the choice of 13,027 mortgages and at much better rates currently obtainable.
Abbey has also confirmed that they wont be passing on the Bank of England half point interest rate cut to borrowers meaning the interest rate on all Abbeys tracker mortgages will keep the same unlike many other mortgage lenders. However if you mortgage is currently with Abbey your will automatically receive the rate cut. Other lenders have also decided to leave their rates the same, including the now nationalised Northern Rock and Bradford & Bingley.possible new borrowers have welcomed the half percent rate cut to 4.5%, many expecting their rat to be reduced however as we have seen with Abbey and many others are not passing the savings onto their customers.Lloyds TSB and Cheltenham and Gloucester, which Lloyds TSB owns, have announced new customers, will now require 25% deposits to obtain new tracker mortgages as opposed to the past 10%.
However it isnt all bad news; many lenders have passed the complete rate cut onto borrowers. These include Royal Bank of Scotland, NatWest, Lloyds TSB, Halifax, the Woolwich and First Direct. These mortgage lenders standard variable rates (SVR) will be reduced in the near future, shortly after the cut.Very few mortgage holders have their repayments with mortgages based on SVR however many find themselves paying this rate when their fixed-rate deal runs. Mortgage lenders move you onto this rate unless you sign up for a new fixed rate deal. SVR is more often than not the most expensive way to have a mortgage with repayments expected to rise by as much as 10%.
Although the number of mortgage products offered is at the lowest, Mortgage lenders are nevertheless offering competitive rates that can save you hundreds of pounds in repayments each year over current rates. By planning ahead, first of all checking what rate your current lender will charge you once your current rate ends and then by searching the market to see the offers obtainable from other lenders; you can ensure you are getting the best rate for you. Using the sets of a mortgage broker can save you time and most will search the whole market and allow you to make an informed decision and give you piece of mind to know you have chosen the best rate for you.
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