Mortgages London | Mortgages in London

Posts Tagged ‘Fixed Rate Mortgages London’

In London, fixed rate mortgages account for just 47% of home loans, the lowest proportion of the market for five years. The decrease has been seen as tracker mortgages have become more popular due to enticingly low interest rates. Trackers are experiencing a record high, and now have 36% of the market. However, as political uncertainty increases, this figure is likely to change as homebuyers opt for the safety of a fixed rate deal.

To get the most out of a fixed rate deal, those applying for mortgages are being encouraged to raise as much money as possible to put down as a deposit. Despite the fact than lending is slowly improving, with the return of 90% LTV, the size of downpayment can have a dramatic affect on the interest rates of a fixed rate mortgage.

As an example, a Londoner who can afford to put down a 30% deposit on a property can expect to net a fixed rate mortgage through HSBC at 2.99%. However, if the deposit is reduced to just 10%, the rates will increase significantly to 5.99%. Saving for a bigger deposit will also help home buyers secure a mortgage too, as lenders like to see proof of consistent saving.

As the lending rules have become more stringent, many Londoners have found it increasingly difficult to secure a mortgage, even with a more than favourable credit history. One of the major factors involved has been demonstrating a history of saving. Even with a lump sum for a 30% deposit, from inheritance for example, some borrowers are finding that lenders are still nervous without evidence of saving.

Unfortunately, each time a borrower is turned down for a mortgage; this in turn affects credit rating. The advice for would-be home buyers is to be patient and save. By accruing a favourable financial history and building a sizeable deposit, it is much more likely that a lender will offer a competitively priced fixed rate mortgage without denting your credit rating.