Photo by Mortgage Rates Unchanged, Homeowners Struggle to Find Decent Deals
The Bank of England’s decision to maintain interest rates at 5.25% has sent ripples through the mortgage market, leaving many homeowners in a bind. Despite average mortgage rates holding steady from the previous week, the quest for affordable deals remains a challenge.
Market Volatility and Lender Response
The current landscape is marked by volatility, with rising costs for mortgage providers leading to the discontinuation of some of the more budget-friendly options. This shift follows the BoE’s choice to keep UK interest rates at a 16-year high for the fifth consecutive time.
According to Uswitch mortgage expert Kellie Steed, there has been minimal movement in average fixed rates for both two-year and five-year deals across residential and buy-to-let mortgages. Although some lenders have marginally increased their rates, the average Standard Variable Rate (SVR) remains elevated at 8.54%. As a result, homeowners approaching the end of their fixed terms are advised to consult with brokers promptly.
Growing Competition and Market Expansion
HSBC’s recent announcement of rate cuts on several fixed deals signals a potential uptick in market competition. The number of available mortgage products has surged to a 16-year high, with a notable increase in deals at 90% Loan to Value (LTV) and above. This trend reflects a slight relaxation in lending practices among providers.
HSBC Mortgage Rates Update
HSBC borrowers bidding farewell to the 3.99% five-year deal now face a minimum rate of 4.24%. For two-year options, rates start at 4.63% with a £999 fee, offering a slight reduction from the previous week. Both scenarios assume a 60% LTV, necessitating a 40% deposit.
For more insights on the evolving mortgage landscape, visit Uswitch.
Renting vs. Owning: A Financial Comparison
In a related development, the escalating costs of UK mortgages have tilted the scales in favor of renting over homeownership. To delve deeper into this trend, read our exclusive analysis here.
