Mortgage rates for homebuyers with a 5 pc deposit have fallen to a record low. A typical two-year loan now costs 3.09 per cent, down from 4.44 per cent 12 months ago, according to Moneyfacts. The average five-year rate fell from 3.97 per cent to 3.39 per cent.
According to Moneyfacts, the choice of mortgage products is the highest it has been since 2008.
The total number of products available for the residential mortgage sector has risen to 5,315,the highest since March 2008 when it was 6,192. Borrowers also now have more choice than they did before the pandemic.
Eleanor Williams, finance expert at Moneyfacts says that increases in rates for most of the lower LTV products, borrowers with the smallest deposits are actually seeing rates fall. Eleanor says:- "It may be that, following the end of the stamp duty holiday which had kept the property market bouyant, providers are now focusing on enticing first-time buyer business, which has often been considered the life blood of the hosing market. Indeed, those looking to secure a 95 per cent LTV mortgage will be pleased to note that at 3.09 and 3.39 per cent , the average fixed rates on offer have plummeted to the lowest on record."
nationwide published an index which showed that last months house prices were 10% ahead of those published for November 2020. The average house price is now £252,687.
Nationwide's chief economist Robert Gardner said prices were now almost 15% higher than when the pandemic first struck.
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Kensington Mortgages has launched a 40 year fixed rate mortgage. Borrowers have the chance to pay the same interest rate for between 11 and 40 years. The interest rates start at 3.34% for people fixing for between 36 and 40 years. The interest rate won't change even if the Bank of England increases the cost of borrowing.
It's rare for mortgages to be fixed for the full term of a mortgage so buyers who fear that rates will rise could benefit from this new deal.
According to Rightmove, the price of property coming on the market has dropped by an average of 0.6% (-£2,044) compared to October, the largest monthly fall since January. This could offer an opportunity for bargain hunters to purchase a property before the traditional New Year boom.
The amount of people who start to browse properties on Rightmove post Christmas Day have been rising yearly, with visits on Boxing Day last year 54% higher than the previous year.
Agents are reporting that many home-owners are decorating and doing small DIY jobs in readiness to start the sales process early in the New year when historically, many new homes hit the market.