Mortgage lenders still increasing their interest rates

Over the last few days many of the biggest banks and building societies have again increased their interest rates.

 

Barclays, Halifax and NatWest have made some of the biggest price hikes, with many of their two-year fixed rate mortgages increasing by the biggest margins.

 

Recent research by Moneyfacts found that the average fixed rate is now over 4%. Some first time buyer rates and lower deposit mortgages are closer to 5%.

 

Despite increases in the cost of mortgage borrowing, lenders are still telling Trinity Financial that they are getting more applications than they can handle. Also, they do not want to top the Best Buy tables because they will then receive even more applications. Lending targets for the year have already been smashed in many cases!

In more normal times there is a strong link with interest rate rises and the Bank of England base rate. This has now weakened.

 

Aaron Strutt, product director at Trinity Financial, says: “In many cases it is cheaper to take a five-year fixed rate rather than a two-year fix. Also, if you are coming to the end of your fixed rate in the next six months, then it is well worth trying to lock into another deal now. This is because interest rates may well soon become even more expensive.

 

"Mortgages are still very readily available if you are ready to purchase. And there are ways to reduce your monthly payments. These can include, for example, taking out part of the mortgage on interest-only, or opting for a longer mortgage term. However, you will then need to have a plan to repay the interest-only element, or reduce your mortgage term, when your financial position improves.”

 

Call Trinity Financial on 020 7016 0790 to remortgage for home improvements or book a consultation