The cost of borrowing has fallen to rock-bottom while the number of mortgages available has risen to its highest in three and a half years.
But there is a sting in the tail – soaring fees.
The average two-year fixed 90% LTV mortgage rate is now at its lowest level since January 2008.
It stands at 5.39%, while the average rate for a five-year fixed deal at 90% LTV is 5.87%.
Two-year fixes generally are at their lowest level. Across the market, they now average just 3.82%, compared with 4.01% in August.
However, it is not entirely good news for borrowers, with set-up fees rising as rates have come down.
For example, cheapest of all the two-year fixes is the deal announced by Leeds Building Society last week of just 1.99% for a 70% LTV. But it comes with a fee of £1,999, in fact making it slightly more expensive than Yorkshire’s two-year fix at 2.49%, which comes with a fee of £995.
According to MoneySupermarket, average fees for fixed rate mortgage products have shot up by 6.4% since June, as rates have come down.
However, there is little doubt that lower borrowing rates for those with less in the way of deposits will be welcome for some.
Louise Holmes, spokesperson for Moneyfacts, said: “Substantial rate reductions in the higher loan-to-value market will be encouraging news for borrowers.
“The availability of higher loan-to-value mortgage products has increased over the past couple of years. Lenders have begun to launch more competitive products to borrowers who during the height of the credit crisis had pretty much given up on the prospect of owning their own property.
“Interest rates are predicted to stay at the historical low of 0.50% for the foreseeable future. Borrowers would be wise, however, to take advantage of low fixed mortgage rates while they can as lenders will increase product rates once interest rates begin to rise.”
Meanwhile, the number of mortgage products available to intermediaries has increased for the tenth month in a row, according to analysis by mortgage sourcing systems provider Mortgage Brain.
Over 500 new mortgage products were introduced into the UK intermediary mortgage market last month, taking the total number of mortgage products listed on its system to a 41-month high of 14,361.
The figure represents 96% uplift in overall product availability compared to this time last year, and a 38% increase compared to six months ago.
Variable rate products have performed the best over the past 12 months, with a 126% increase since this time last year, and now represent 2,224 of all available products.
The number of fixed rate products increased by number by 3% with 251 new products launched during September, and now account for 8,524 of all available products.
Trackers account for 3,613 of mortgage products.
Mark Lofthouse, CEO of Mortgage Brain, said: “The past few years have been incredibly challenging for the UK mortgage market, and for mortgage brokers in particular.
“However, the data from our product analysis over the last few months has been extremely positive and this continues to be the case.
“Mortgage product numbers continue to rise and are now at their highest level since April 2008, which is great news for the intermediary mortgage market as a whole.
“The number of products with an 80% or more LTV ratio has increased by around 30% over the past six months and the number of buy-to-let products has also increased, with more and more buy-to-let lenders returning to the market.”
Comments
bye wardy. xxxx
bye bob
I don't think I should take this one any further chaps on estate agent today - however I might just right it up and send it to Razzle.
wardy: I disagree, mon ami.
It is clearly as high as dobalina dare attempt to raise his bar... ;o)
@bob dobalina iagree with Wardy, you can do much better or has he got you?
bob..........thats was rubbish. You can do better than that.
Hi Jonnie -
would you like me to be a trannny? i dont mind - really i dont - in fact its getting me going a bit. I suspect you have been waiting for ages to publish your tranny anecdote - bet it really got your heart pumping clicking those keys eh?
do you think about it at night?
you poor frustrated chap.
Brian - What put down did Johnnie aim at me? you might want to read the comments before you reference them. Am i irritating you or something?
FBA - the old ones are still the old ones!!
FBA: I would do nothing, Sir.
I would never be so drunk as to climb on the fairground ride in the first place... ;o)
Peebee,
you're on a horse, galloping away at speed. on your right is a sharp drop off, on your left is an elephant traveling at the same speed. directly in front of you is a kangaroo and your horse is unable to overtake it. behind you a lion is chasing you. what must you do to get out of this highly dangerous situation?
Jonnie
Now I REALLY understand the true meaning of 'that' phrase you originally coined - at the cost of a perfectly good keyboard I remind you...! The phrase which should...nay, must... be entered into the dictionary at the earliest possible opportunity as there is none which is more apt and fit for purpose. The perfect label for the drawer that the bob dobalinas of this world should be filed under:
GENERAL TOSSPOTTERY!!
You are a legend, mon ami! ;o)
Oh how I love reading these comments. I don't often comment myself on these pages. But I had to today, this trail of comments is so amusing. Keep up the good work! And yes I am an EA, 20+ years and happily counting.
Jonnie , what a quality put down for Slappy, Bob and crew, very, very funny!
I don't think you have left them a way back without making themselves look even dafter than they have done to themselves!
@Bob
Bless you– im sorry, I dint realise you pursued this as a hobby, we have had others on here that pass their time the same way, we EA’s do struggle to ‘get you’ and there is the question over why you haven’t got anything else to do with you time and intellect but fair enough – wind away, in fact knock your self bandy mate and enjoy
We are here for you (me , Wardy, PeeBee etc) and consider it an honour to play a part in increasing someone’s happiness.
In fact its funny, you have reminded me of something, I went to what was described as a ‘cocktail party’ not that long ago and two chaps thought it would be absolutely rip roaring hilarious if they dressed as women, heels, frocks, wigs the lot – well Bob, you would have laughed mate, they thought they were the funniest bloody thing ever, peeing them selves laughing when the rocked up looking like a couple of bad trannies, trouble is the rest of us looked at them and just felt sorry for them and didn’t get it………………like we don’t get you mate
So, enjoy your new found pastime as the online / blogging equivalent of a tanked up fat trannie but forgive us if we don’t ‘get you’
Jonnie
Brian - What am I trying to say... do tell? When you have worked it out and if you dont care feel free ignore me.
What mischief.
problem is chaps is that you take it all so seriously.
i am not an agent or an FA. In fact i am just a plain old punter having a bit of fun and winding you up.
you need to stop your mum putting labels in your pants and grow up boys.
Oh Poor Bob Dob...
I'd like to see things from your point of view but I can't seem to get my head that far up my bum. Are your parents siblings? You always seem to have your ear to the ground, so tell me, how's life in the gutter? Careful now, don't let your brains go to your head! Brains aren't everything. In fact, in your case they're nothing. Keep talking, someday you'll say something intelligent! Is your job devoted to spreading ignorance?
So - the truth is out!
bob dobalina 'outs' himself as a despite-living-off-their-backs-for-years-is-still-hateful-of-Agents FA.
WOW! THERE'S a first...!
Luckily for you, bob, the 'decent standards' you refer to in FS doesn't cover literacy.
EVERY Estate Agent I have ever met has a navEl. I'm still waiting to meet the first with a fleet of ships where their umbilicus (that's belly-button for clarity) should be...
Oh - don't forget, I'm NOT an Estate Agent - so which profession are you going to have a pop at in the futile hope of including me and making me skweam and skweam until I am sick?
Unhappy Chappy- what a childish post, you actually post as if you think peolple care what you try to say?
Dear Bob Dobalina
……….which post is an agent ‘whinging about mortgages’?
Jonnie
You estate agents are priceless. Whinging about mortgages, when the truth is without them you would be screwed.
Gaze at your own naval before passing judgement on an industry that has regulations and decent standards, unlike estate agency which is still like the wild west.
Oh, I forgot to wind up fun boy agent and wardy. Where are you girls?
Re 'this is a non story' comments. How crass can you get?
How can it be a 'non story' when there have been so many reads and comments, and when so many borrowers take out two year fixes?
Comments saying 'this is a non story' should be banned. Just stupid. Best to regard them as non comments.
It's always 2 year fixes in the news. What idiots go for 2 year fixes with high fees? What type of person goes for any 2 year fix?
It's a non story.
I dont think GB is right by way or that his post is on topic?
@ @GB were you formally the loads o money character on the Harry Enfield show? :0)
The biggest 'con' of all?
*£200,000 purchase with 30% deposit = £140,000 at (say) 4% interest.
*£200,000 purchase with 25% deposit = £150,000 at (say) 5% interest.
Q. How much EXTRA is the £10,000 difference costing?
*Not actual - theoretical
Seems appropriate to include arrangements fees in 'borrowing costs'. How else could they be described?
Keep renting or getting benefits to pay it, mugs like you a fueling me pension fund, thanks.
@GB
Could you elaborate and tell us how you have come to this conclusion based on this article, or did you mean your post to be on another item, there appears to be nothing within the above to suggest such a view
The arrangement fee is a very good way of front loading the interest payments when you are churning.
A 2 year fixed rate mortgage is a way of churning business because the suckers that buy into it, have to do it again in 2 years time.
Woo hoo - MORE FEES!
A 2 year fixed rate deal is not fixed at all.
If you look at market trends over the last 50 years it is obvious that there is no protection from 2 years fixed.
If rates rise aggressively enough to make a fixed rate worth having above and beyond a variable rate then that trend ALWAYS continues for longer than 2 years.
I suppose it protects you a little bit, but not enough to justify these huge fees.
We are all being robbed blind by nasty bankers again.
Why doesn't the useless government step in and say to lenders - just as you have to able to justify charging someone £35 for sending an automated letter pointing out they went £1.50 overdrawn for 10 minutes - you have to justify £1000 arrangement fees.
Yet another proof as to why this market is rotten to the very core and a real collapse, not just this current stagnation, is on its way.
As a surveyor doing m.vals, I am certainly not benefiting from soaring fees, if anything fees are reducing.
Saturday's Daily Telegraph - more expensive mortgages are just round the corner, following UK banks' downgrade:
http://www.telegraph.co.uk/news/uknews/8814851/Banks-must-show-they-can-pay-their-way-in-the-world.html
Mortgages are available but that is not the end of the problem, affordability is the often left out part of the equation.
Ing Direct are offering 2.65% with £0 fees, 12 seconds searching yielded 10+ mortgages under 4% with no fees!
@IO
Spot on!
I sometimes wonder how and when arrangement fees crept in without it being an illegal cartel as all lenders must have started charging them at the same time.
I left Nationwide 18 years ago and all we charged a borrower was the application/valuation fee usually no more than £120 even on a (then) big loan.
IO have heard these called "money reservation" fees - what nonsense.
I also often wonder given their outrageous fees and creativity in compiling their tariff of them how any financial body ever fails to make shedloads of money. Truth is most of the time if a borrower stops to work it out the fee will outweigh the benefit of the low interest rate charge especially if it is only a 2 year fix.