Record low rates for fixed mortgages

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Borrowers could save money in the long-term by locking into the growing number of fixed mortgages with low rates – which are still falling as lenders seek new business.

The average two-year fixed-rate for anyone with a 10% deposit is now 3.06%; a year ago it was 3.84%.

The rates being charged by lenders have dramatically fallen in the last four years – a borrower with 40% equity in 2012 would have got a two-year fixed deal at 4.05%.

The same deal is available today for just 1.99%.

Low interest rates available for mortgages

Borrowers are being advised to lock into the low interest rates available for mortgages because they will disappear when the Bank of England raises interest rates.

Charlotte Nelson of Money Facts said: “It’s a question of when rather than if the Bank of England raises interest rates so borrowers should take advantage of the current low mortgage rates.”

She highlighted too that the figures published are averages and if borrowers shop around they would find better deals.

Ms Nelson is also advising borrowers to use the money they save to overpay their mortgage in a bid to decrease the loan’s term.

She explained: “By taking advantage of cheap rates, borrowers should consider using the cash saved for making mortgage overpayments. Most current deals offer this option and for someone paying £100 a month extra on top of their normal repayments, a borrower could shave three years from their mortgage term.”

The reappearance of self-certification mortgages

Also, the reappearance of self-certification mortgages has led to the Financial Conduct Authority (FCA) to issue a warning.

The regulator has stepped in after the launch in the Czech Republic of selfcert.co.uk to advise potential borrowers that if things go wrong they will have no UK protection.

That’s because the company is based outside the UK and is therefore beyond the jurisdiction of the FCA.

In the days after the company began touting for interest, they were deluged from thousands of borrowers who are self-employed wanting a mortgage.

The firm has now stopped taking applications as they deal with a backlog of those who have registered.

Self-certification mortgages were hugely popular before they were banned in 2014 by the FCA.

Bridging loan sector will see new entrants

Meanwhile, the UK’s booming bridging loan sector will see new entrants coming to the market to help meet demand which will be good news for specialist finance brokers, according to one industry expert.

The managing director of Alternative Bridging Corporation, Brian Rubins, told a national newspaper that new bridging loan lenders will emerge in 2016.

In addition, he explained that experienced bridging finance brokers are an asset to lenders as they know how to propose a loan and assist in closing a deal.

Alongside this will, the industry will see a growth in the number of bridging loan finance products from lenders becoming available and the amount being loaned growing ever larger, he said.

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