Current mortgage rates: fixed rate reductions and help to buy boom

This week has been a mixed bag in terms of rate movements, with buy to let, help to buy and fixed rate deals taking centre stage. Swap rates leapt back up this week after rising house prices were deemed a major threat to the economy, however, as expectations of interest rate rises eased, mortgage rates have remained exceptionally low with competition in the market stronger than ever.

As the outcome of buy to let changes reverberates throughout the market, soon-to-be tax relief changes have pushed the motive to grab a deal while it’s hot – and do so before changes come into action next year. Banks’ end of year targets are looming, causing many lenders to pull some of their best deals out of the hat – evident from the flurry of reduced fixed rates launched this week. Incidentally, mortgage lending hit levels unseen since before the financial crisis, while mortgage rates have dropped to the lowest figures on record.

Meanwhile, in line with our prediction last week, the rise of commercial landlords in the evolving market have been filtering into buy to let, as lenders continue to respond to news that commercial landlords will be exempt from tax relief changes.

Despite the rocky terrain for other landlords, however, the Chancellor has lent a helping hand to those stepping onto the property ladder. A wave of Help to Buy ISAs flooded the mortgage market this week, including prosperous help to buy deals and saving incentives. Skipton Building Society, for example, has revealed a new help to buy product range with up to 0.65% cuts on high loan to value (LTV) products and 0.2% on existing help to buy purchase and remortgage rates.

As ever, we’ve been keeping track of the latest rate changes and posting them in our daily rate updates. A trend of help to buy ISAs and reduced fixed rates has evidently developed over the past week…even with some buy to let reductions thrown into the mix.

Accord has reduced its 2 year fixed rate 75% LTV products, so that landlords with a 25% deposit will now access a 2.19% rate with a £2,495 product fee, as well as releasing a 3.09% fixed rate with no product fee and £500 cashback upon completion.

Santander has equally updated its buy to let offering, with new 60-75% LTV products available for purchase and remortgages. This includes a 1.99% 2 year fixed rate at 60% LTV with a 1.5% booking fee, a 2.54% 2 year fixed rate at 75% LTV and a 3.64% 5 year fixed rate at 75% LTV.

A limited edition 75% LTV buy to let product range was launched by Precise Mortgages. Lifetime tracker rates have been reduced to 0.26%, 5 year fixes were discounted by 0.4%, while 2 year fixed rates lowered by 0.3% and 2 year tracker mortgages now stand at 3.39%.

At the fixed rates end of the market, Tesco Bank made cuts on 2, 3 and 5 year fixed rate products, revealing some of the most competitive rates on the market. These include a 2.19% 5 year fixed rate at 60% LTV with an £800 product fee, a 2.34% 3 year fixed rate at 85% LTV, as well as a 2.59% 5 year fix at 80% LTV and a 2.79% 5 year fix at 85% LTV.

BM Solutions on the other hand, decided to increase rates on 2 year transfer products by 0.2%, perhaps in line with the increasing demand of customers looking to switch deals…

Virgin Money was another lender to apply changes to fixed rates – this time reducing its offering. Removing products across its 2 and 5 year fixed rates, for both remortgage and purchases. Virgin Money has instead extended its offering to buy to let, unveiling its latest range of 2 and 5 year fixed rate buy to let mortgages.

Combining low fees and a decent cashback offer, Virgin Money’s 2 year fixed rates have now fallen below 2%, while 5 year deals sit below 3% for property investors with higher deposits. The biggest highlight of its new offers is a 2 year fixed rate of 1.99% with a £1,995 fee plus £750 cashback.

The future of when rate rises will occur remains speculative, so we recommend taking advantage of the best deals available right now to ensure you do not miss out, and prepare your finances for change. Who knows what next week’s rates will bring?

Arrange to speak to an Enness Broker