Is Another Mortgage Price War On the Cards?
2 minute read
There’s exciting news for those with larger deposits looking to move or get on the property ladder this month. HSBC has recently announced its all new 1.16% two-year fixed-rate mortgage. Although borrowers will need to have a considerable deposit (35% plus a product fee of £1,499), this is an impressive price slash. But this fresh, low-cost mortgage could be the tip of the iceberg, with many in the industry predicting a price war between providers as they fight to gain market share. Although HSBC’s interest rate is the lowest ‘fixed’ on the market today, there are indications that other lenders are lining up to make their offerings more competitive too – albeit, not in terms of price. Yet. Here’s a quick overview of some of the major changes in the market over the past month: – Barclays: The bank’s “family springboard” guarantor mortgage’s upper limit has been raised to 100%. – Halifax: The maximum age for borrowers has been raised at Halifax. – Nationwide: Here too, maximum ages have been raised, while “small deposit” mortgage interest rates have been reduced. The competition now bubbling under the surface amongst mortgage providers is yet to really kick into action and has not yet driven rates to an all-time low. That low hit in July 2015, when the Post Office offered a 1.05% mortgage rate with a 40% deposit. Perhaps hampered by fears about the potential for market disturbance caused by the upcoming Brexit vote, mortgage lenders have not yet pushed their rates to record-breaking levels. With many providers appearing to be arming themselves for a fresh battle for new business, we may see record-breaking rates and a full-blown mortgage price war in the not too distant future. This time, however, many industry commentators believe the real battlefield will not be mortgage rates, but lending criteria. With both Halifax and Nationwide relaxing criteria over the last month to entice new customers, perhaps it’s the T&Cs, not the headline interest rate, which borrowers should really be paying attention to to secure the best deal? Do you think mortgage rates could reach an all-time low this year? Do you have a large enough deposit to take advantage of a price war? Have your say below, or for personalised mortgage advice and expert brokering, contact the JMB team today on 0800 114 3575.