Mortgages London | Mortgages in London

These are interesting times for borrowers about to come out of a fixed rate mortgage deal. With the incredibly low interest rates available for variable rate mortgages, it seems like the best option would be to take the plunge and embrace tracking the base rate. On the other hand, with the new Government coalition thrashing out its policies whilst the country waits with baited breath, maybe it is time to play it safe and opt for fixed mortgage rates in London.

Believe it or not, despite the political and economic confusion in the UK at the moment, it is still better to back the variable rate option, especially if you took out your current mortgage before April 2009. If the Bank of England’s base rate were to go up, it would only be by a small margin at a time, a quarter of a per cent, and it would therefore take quite some time to reach the mortgage rates that are presently associated with a fixed rate mortgage.

Be warned though; just because you have chosen a mortgage with a rate that allows you a little spending money each month, it doesn’t mean that you should stick to your minimum payments just to be able to afford the odd luxury here and there. The advice of many brokers is to make overpayments whilst the interest rates are favourable and build up equity in your London property while you can.

Mortgage rates may be low now, but they will inevitably rise as the property market recovers and the economy becomes stronger. This means that the best bet for borrowers is to prepare for the time when a fixed rate mortgage is the better option. The larger the proportion of your property you actually own, the better fixed rate mortgage deal a lender in London will be able to offer.

Properties in London are notoriously more expensive to buy that anywhere else in the UK. House prices in the city can make it difficult for Londoners to buy a home in the area they have grown up in when they decide they are ready to invest in a property. Thankfully, new low rate mortgages from the Yorkshire Building Society might make London properties an affordable investment for cash strapped buyers.

The Yorkshire Building Society is the second biggest building society in the UK, and it has been cutting mortgage rates continuously this year in a bid to double the number of borrowers on its books. By making low rate mortgages more readily available, it hopes to attract more Londoners who are trying to get on the property ladder. The product launch means that a further 0.44% has been knocked off all fixed rate mortgages available from Yorkshire.

The new packages include two two year fixed rate deals, for which you will need a 25% deposit. One has a rate of 2.95% and an arrangement fee of £995 and the other has a fixed rate of 3.05%, and although it comes with the same arrangement fee, there will be no charge for valuation and legal costs. There are also two three year fixed rate mortgages available too, which also require a 25% deposit. Arrangement fees are the same as the two year deals but the interest rates are 3.89% and 3.99%, with the higher rate once again in lieu of free valuation and legal fees.

For anyone finding it difficult to stump up a deposit of 25%, the lender has also reduced rates on 85% LTV packages, offering two year fixed rate mortgages from 4.39%. The low rate mortgages will help boost the already booming property market in London and give both first time buyers and those who are ready to remortgage a chance to invest their money wisely.

The best way to get a free mortgage quote is to do your own research online according to financial advisors. Digital marketing has become a priority for most businesses, and a strong online presence means that banks, building societies and mortgage brokers can compete with each other effectively by offering competitive rates and free services. The convenience of online research means that potential borrowers are more likely to choose a lender they have found online rather than putting in the leg work on the high street.

Borrowers can get a free mortgage quote by simply filling in a form for a specific lender, or a general enquiry form that will then generate a response from a number of lenders, essentially giving a quote comparison at the touch of a button. What should be stressed however is that once you have a quote for a mortgage, you should use this to strike a better deal with a lender directly, or through a broker.

Deals advertised online can be tailored to some extent if it is through a lender you already bank with, and being armed with quotes from competitors could well see a lender offer something better tailored to meet your budget if they think you are a good investment. Striking a deal with a lender will be much easier if you can demonstrate that you are a good borrower, and contrary to popular belief, this doesn’t mean that you have never accessed credit before. The ideal borrower as far as a lender is concerned is a person who has taken out loans and credit cards in the past and paid them off regularly with no breaks in payments.

Demonstrating the ability to be able to save money is a plus point too, even if it is just regularly tucking away a bit each month. Being able to prove that you can manage your money will show that you are able to take on the responsibility of a long term loan and should result in a better quote because you are considered a low risk.

There are new 90% mortgage deals on the market for first time buyers from both the Nationwide building society and the Post Office. After the announcement that cuts in interest-only mortgage lending would hit first time buyers the hardest, these new mortgage deals look set boost the chances for new property investors in London.

As of today first time buyers can access mortgage deals from the Post Office that have been heralded as some of the best buys on the market. The deals have become available after Government funding to the tune of £180m was injected into the Post Office to help increase the range of banking services and in particular help fund high LTV mortgages for first time buyers.

The 90% mortgage deals are available at two, three or five year fixed rate of 5.45%, 5.99% and 5.99% again respectively. The three year option is also available with a lifetime tracker of 4.99% above base rate. It is thought that these new products aimed specifically at first time buyers could double the value of the company’s books, justifying the large investment.

The Nationwide 90% mortgage deal is only available to existing customers, specifically ones whose main current account is the FlexAccount. This reflects the growing trend for banks and building societies to be offering their best mortgage deals to loyal customers directly, and it also addresses the need to boost the proportion of first time buyers to bolster the property market.

The Nationwide deal is available with a three year tracker at 4.48%, a rate previously only accessible to those who had a t least 30% deposit, and there is speculation that existing customers with a FlexiAccouint could in fact strike a 95% LTV deal with the building society. For Londoners who are not able to take advantage of the Nationwide deal, and feel that the Post Office tracker rates aren’t quite good enough, the advice is to sit tight; 90% first time buyer mortgages will be coming to a bank near you soon.

If you thought that cheap London mortgages came wrapped up in an interest-only package, then think again. As of today, borrowers who would prefer to pay off capital with an expected windfall or annual bonuses will have to provide their mortgage lender with proof that adequate savings are being built up. Interest-only mortgages have always been popular with City workers in London. Where penthouse pads come at a high price but big bonuses are being paid, an interest-only option equals a cheap mortgage.

Lloyds, Halifax, and Cheltenham & Gloucester will be the first lenders to restrict the number of interest-only mortgages available to borrowers in a bid to reduce the financial risks associated with speculative investment. Financial professionals are worried however that creditworthy investors will be prevented from accessing a cheap mortgage that they could easily afford to pay off. The change will affect anyone who wants to borrow in excess of £500,000 through Lloyds as they will be expected to make capital repayments.

Halifax and Cheltenham & Gloucester customers who want to take out a large interest-only mortgage to purchase a London property will have to pay a levy of 0.2% and provide a watertight capital repayment plan. This means that expected bonuses, investment or inheritance windfalls, and asset sales will no longer be taken into account. Instead, City workers who want to secure an interest-only deal will have to provide evidence of annual savings.

It is thought that today’s announcement will spark other banks to follow suit quickly, bringing an end to this type of loan. Borrowers need not fear though as cheap London mortgages are still available thanks to a drop in interest rates by the Bank of England. The average charge on a two year loan fixed rate loan has been calculated at 3.83%, the lowest figure in 15 years.

The latest free mortgage advice from London brokers is to stick with your current lender. Yes, it is official, the best mortgage deals are being offered to existing customers. It stands to reason that mainstream financial institutions should want to keep hold of their customers when they are looking for a new loan product, and it makes sense that as an already loyal customer that anyone who wants to take out a mortgage should be offered some sort of reward for their loyalty.

There are currently 2,948 mortgage deals available according to a financial research company, but 25% of these are only available to existing customers. These deals give current account holders an opportunity to take advantage of mortgage deals that are 0.05% to 0.20% cheaper than the lender’s typical variable rate deals.

This is not the only advantage of taking out a mortgage with your current financial establishment, it is likely you will be offered reduced fees and possibly higher LTV mortgages than are usually offered to new customers. These hidden benefits mean that it is worth talking to someone at your local bank to get free mortgage advice that could save you money when buying a property in London.

The trend of offering exclusive deals to existing customers could not only help the banks build their businesses back up, but it can also help improve the property market by making mortgages more affordable for borrowers. The move could also help lenders avoid approving what could turn out to be a bad debt.

If an existing customer has proved themselves capable of managing their finances, then it is more likely they will be able to keep up mortgage repayments. Lenders will feel more assured about the type of mortgage deals that can be offered to customers based on their past borrowing and banking habits.

Despite the concerns over European debt, London mortgage rates remain attractive as the Bank of England keeps interest rates at 0.5%. This will be the 14th consecutive month that rates have been held so low, and it is predicted that these levels are here to stay; at least until the political unrest within the UK begins to be resolved.

Interest rates have to be kept low, as any rise during the current political and economic climate could send the UK spiralling into a financial black hole that would be incredibly difficult to recover from. As such, whatever the outcome of the hung parliament, the coalition will have to keep interest rates low to prevent further economic decline.

This is good news for anyone interested in London property investment as it appears there has never been a better time to get a mortgage. The current mortgage rates will encourage investment in London properties which will in turn help the economic recovery by providing the foundations for a strengthening housing market.

One of the best products on the market at present is a tracker deal from Market Harborough that has an initial rate of just 2.49% over 2 years, ideal if interest rates remain at their current level. However, in the event that rates rise before the two year initial term is over, anyone that has taken out this loan can switch lenders to take advantage of lower mortgage rates without paying an early repayment charge.

Products such as this are ideal for Londoners who want to invest in a property now. It must be stated however that this product comes with a higher than usual arrangement and booking fee of £1,250 and requires a 25% deposit. It is estimated that the average price for a London property is £368,825, which means that a the minimum deposit would work out to be in excess of £92,000.

Hybrid loans are becoming more favourable than traditional mortgages, and look set to offer investors peace of mind in the gloomy light of economic uncertainty. As with elsewhere in the UK, London fixed rate mortgages are more expensive than trackers, but offer an element of stability. Hybrid mortgages on the other hand, can give the borrower the best of both worlds. HSBC bank is currently pushing its split-loan option heavily, hoping to attract customers that like a bargain, but don’t want to risk their home whilst the powers that be battle it out for political domination.

A split-loan option is available from most banks, but as it combines two mortgage deals, it usually comes with two arrangement fees; the HSBC option has just one fee that is under £1000. This deal is available for loans up to £500,000, and depending on what percentage of your mortgage is fixed rate, repayment amounts will vary. As you’d expect, the larger the proportion of your mortgage that is tracking the base rate, the cheaper your repayments will be. With just 25% of your mortgage at a fixed rate you can take advantage of interest rates at 2.49%, but with 75% fixed rate this will rise to 2.99%.

The advantages of a hybrid option are clear, if interest rates stay favourable, you can pay off the tracker part of your mortgage quickly without paying early repayment penalties. Alternatively if interest rates rise unexpectedly, you can switch to the fixed rate option and keep in control of your monthly payments until the economic situation is more favourable for tracker deals.

Whilst fixed rate mortgages have been less popular than its base rate tracker cousin recently, the speculation over interest rate rises have actually increased the number of applications in London for fixed rate mortgages. The new deals available from HSBC might however see the popularity of this option superseded once again by flexible terms that help the borrower stay in control.

If you are a first time buyer then you have more chance of getting a mortgage quote that means something in London than anywhere else in the country. This is because London is the only place in the UK where the property and mortgage markets are generating figures that reflect a thriving recovery. House prices are going up and there are plenty of first time buyers to feed the process, and more importantly mortgage applications are being approved.

Elsewhere in the country though, the figures reflect an alternative reality. According to a recent survey, only 26% of the population who are planning to buy a property within the next 12 months are first time buyers, this is an increase of just 5% since the beginning of the year and indicates a close to stagnant market for the next 12 months. The figures have come as a surprise to lenders who were hoping that the stamp duty holiday offered to first time buyers would serve to boost the market.

Ideally a healthy housing market is comprised of around 40% first time buyers, but due to restricted lending, this actual number falls far short of the ideal; with the exception of London. The capital has the highest percentage of potential borrowers than anywhere else, with an above target figure of 43%. The majority of these potential buyers also think that now is a good time to invest in a London property as interest rates are low, and property prices are slowly rising.

By securing a favourable mortgage deal now it is possible for first time buyers who are purchasing a London property to get a return on their investment in the near future; an opportunity other locations in the UK might not be able to offer buyers. Mortgage advisors in London recommend that potential borrowers obtain a mortgage quote now to find out if they can feasibly start climbing the property investment ladder.

There is a chance for some homeowners to access heavily discounted remortgages from London based Toscafund, which could potentially knock off as much as a fifth off the value of an existing mortgage debt. The incentive will not only reduce the cost of a loan for borrowers, it will bag the new lender substantial profits and help bolster the housing market at the same time.

The Government has focused on encouraging banks and building societies to offer mortgage packages to UK residents in a bid to support and help the recovery of the property market as well as boost the economic recovery of the country. The new remortgage incentive is set to do just that. The hedge fund has acquired existing mortgage portfolios from several international lenders at a value far less than the worth of the debt, and if it can persuade the mortgage holders to remortgage, they will be able to make a profit.

An undisclosed UK lender will soon be notifying anyone who is eligible about the deal offering them a chance to switch to another mortgage provider and reduce their current debt by between 15% and 20%. The offer will only be offered to those who are up to date with their payments with their current lender. The company spent approximately £255 million buying the portfolios; to yield a significant return on this investment it is thought that the company will need to persuade around 70% of homeowners to refinance with another lender.

These remortgages will be available to eligible UK candidates until late summer and are thought to be a welcome offer at a time when many homeowners can take advantage of the current low interest rates through remortgaging. It is thought that thousands of homeowners could benefit from the opportunity.