Many have been speculating on the future of mortgage rates following the changes enforced by the Spring Budget and the new Mortgage Credit Directive (MCD), introduced at the beginning of the week. Yet surprisingly, movement has remained relatively lacklustre as far as rates are concerned. While the long-term effects of the Spring Budget and the MCD remain largely speculative, much of the market has taken its foot off the gas and is now cruising at the pace of a lender stand-off, with little change to the low fixed rates and generous offers currently available on the market.
Despite this, the most central sector to rate movement this week was buy to let, as the stampede of borrowers hoping to complete before stamp duty changes showed no sign of easing.
Fleet Mortgages in particular, has been reducing its buy to let rates consistently over the past two weeks, now reducing rates across its buy to let range by 0.1 of a percentage point for 2 and 5 year fixes at 65% loan to value (LTV). Now standing at 2.59% and 3.59% respectively with a 1% product fee, Fleet’s 2 year fixed rates at 65% for limited companies have also been cut from 3.99% to 3.89% with a 1.5% fee, and from 4.29% to 4.09% with a £750 fee.
5 year fixes are also now available at a reduced rate of 4.19% with a 1.5% fee and 4.09% for a 2 year fixed rate at 75% LTV, or at 4.29% with a £750 fee and 4.39% for a 5 year fixed rate with a 1.5% product fee.
Meanwhile, Accord Mortgages revealed the launch of a 10 day sale on its buy to let products for landlords remortgaging. Rate reductions include the lender’s 2 year fixed rate at 2.79% and a 5 year fix at 3.44%, which both now have a 50% reduction to the product fee and 0.1% off the rate.
This is not the only beneficial news for borrowers looking to secure a buy to let, however, as Paragon Mortgages has also refreshed its buy to let fixed rate offers. With new deals for both individual landlords and limited companies, the lender has added new stepped fixed-rate deals to its existing range. A 2 year fixed rate of 3.65% with a 1.5% product fee is now available, along with a 5 year fixed rate at 4.49% with a £995 fee at 75% LTV. This 5 year fixed rate also boasts the potential for the rate to either increase every year until the end of the term, or decrease dependent on the landlord’s circumstance.
Elsewhere in the market, many lenders have also been creating a platform for the higher end of the loan to value spectrum, now offering new rates and products specifically tailored to borrowers with high LTVs.
Accord Mortgages followed the footsteps of Santander last week, by applying new offers to its range of high LTV mortgage products. As Santander previously revealed a 2 year fix of 1.99% at 85% LTV, or from 3.14% to 3.39% at 85% to 90% LTV, Accord has reduced high LTV rates by up to 0.13% for 5 year fixes at 90% LTV. Now offering a 5 year fixed rate of 3.26% at 90% LTV with an £845 product fee, or 3.44% with no fee, the new deals from the lender have proved extremely competitive across the market – particularly as Accord’s own 5 year fix at 60% LTV currently stands only 1% lower at 2.25%, despite being considered the lowest and highest risk cases.
Amidst these new offers, the MCD has also introduced tightened criteria for many across the market, including changes to second charge, foreign currency loans and buy to let. Although not directly affecting mortgage rates per se, this will undoubtedly have a knock on effect, with the potential to restrict lending in these areas and create longer application times for borrowers. You can read more about what to expect from the MCD here.
Equally the Spring Budget has proved a topic of debate across the industry, provoking some confusion around its effects on the property market. Buy to let will be the space to watch in relation to the arrival of tax and stamp duty changes in April, evident from the low buy to let rates currently being released to compensate for the complicated changes. This isn’t all negative, however, as lenders are also likely to increase their offers to landlords buying through a company vehicle, as mortgage interest relief cuts will not apply to them. You can take a look at the highs and lows of the Spring Budget in more detail here.
In line with this, although the aforementioned rates are indicative of current market activity, private lenders will not publish their rates, and we are restricted in our ability to relay this information. Although we should emphasize the fact that their rates are often much more competitive. You can stay on top of the latest mortgage rates and news as it comes with our daily rate updates.
If you have any questions on this week’s mortgage rate updates or market activity in general, you can contact one of our expert brokers below who will always be happy to discuss your options.