This post is the March update to our monthly review on what is happening with mortgage interest rates. You can see the previous months here:
I do these monthly posts as there has been a lot in the news about interest rates in recent years. What I read I found confusing and/or misleading and we are mortgage brokers! Who remembers there being mortgages under 4% last year for example? There were! But they were typically up to 60% LTV and came with larger fees so not really of much use to most people.
Last months I did a week or so after the Bank of England rate change, but this months was always going to be the one which would show where rates have settled.
What mortgage rates we are looking at?
I have looked at 4 types of mortgages. Mortgages that I think would appeal to a wider range of people than 60% LTV with a large fee!
These 4 will remain the same so ensure a fair comparison. The 4 scenarios we are looking at are:
- 2 year fix at 90% LTV with a £999(ish) fee.
- 5 year fix at 90% LTV with a £999(ish) fee.
- 2 year fix at 85% LTV with a £999(ish) fee for adverse*
- 5 year fix at 85% LTV with a £999(ish) fee for adverse*
Adverse covers a lot, from some late payments through to defaults or CCJs or bankruptcy. For simplicity, I will say someone with 5 defaults for £1,000 each dated 2 years old at time of application. Enough to mean it will not be accepted on the high street but not the most severe end of adverse either.
What mortgage rates are available now?
*October update I missed which is why its skewed that month.
Again, no different to the last 4-5 posts – rates have been stable. Although the slight bit of excitement is that all of the rates are as low as they have been since at least November. That does seem to suggest rates are on a downward trend, albeit a very minor one.
I said last month that I would like the dust to settle and things to calm down and that seems to be the case. I like business as usual, there has been too much “excitement” over the last 2-3 years so calm and steady is nice.
There are a couple of points which need to be noted. In some cases there may be cheaper products out there. However these products are only available to certain people. For example people who live in certain postcodes or are staying with your current mortgage lender. I have not included those products. I have tried to stick to products which are available on the open market to the majority of people.
For the adverse products, I have also ignored the lenders who credit score applications as realistically although it is within criteria, the likelihood of being accepted is very very low.
Summary
It is tricky to write anything beyond what I have covered off really, rates have been steady since we started to run this report. We have heard lots in the news about rate rises and drops, but the reality for most people is that very little has changed.
April and May’s update could be an interesting one. With the change in stamp duty coming in, it will be interesting to see whether it will have an impact on the market. My personal opinion is that it probably wont. Buying a home takes a few months to go through, so my thoughts are if that were to have an impact it would have happened by now. But time will tell.