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The best residential mortgage rates 09.04.21
Derin Clark

Derin Clark

Online Reporter
Published: 09/04/2021

Homeowners who have come to the end of their current fixed rate deal and have moved onto their lender’s standard variable rate (SVR) should consider remortgaging, as it might reduce their monthly mortgage repayments. At the moment, rates in the remortgage charts remain highly competitive, making this a good time for homeowners to remortgage. Those looking to move home will also find that rates within the moving home charts remain competitive low this week, while those looking to take their first step onto the property ladder will be pleased to see that lenders are continuing to re-enter this market.

Although rate is important when looking at mortgage deals, the lowest rate on offer may not be the best deal for the borrower. Instead, they should consider a range of factors including product fees, incentives and flexible features when looking at deals. Those who would like more help and advice on choosing the right deal for their individual needs should consider speaking to a mortgage broker who will be able to highlight the best deals available.

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The best buy-to-let mortgage rates April 2021

Buy-to-let (BTL) remains an attractive investment opportunity for many investors, but when considering a BTL investment, it is important to factor in the costs of mortgage repayments on the property. To help new and existing landlords ensure that they are getting the best BTL mortgage deal, we’ve highlighted the top rates available in the two, five and 80% loan-to-value (LTV) mortgage charts.

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Holiday let mortgages bounce back to pre-pandemic availability

With continued uncertainty around foreign travel, the UK-based holiday market is set to boom this summer and with new research showing that holiday let mortgage deals have bounced back to almost the same as what was available pre-pandemic, now could be a good time to invest in a holiday let.

Research carried out by Moneyfacts.co.uk has found that there are currently 149 holiday let deals available on the market, which is just 13 less than was available at the beginning of March 2020, before the first lockdown, when there were 162 holiday let deals. As well as this, the number of lenders offering a holiday let mortgage has increased slightly, up from 20 at the beginning of March 2020, to 21 today.

Saying this, the average rate available on a holiday rate has risen over the last year to 3.95% today, up from an average rate of 3.37% at the start of March 2020. For those considering investing in a holiday let, it could be worthwhile speaking to a mortgage broker who may be able to highlight deals offering below average rates.

Commenting on the holiday let mortgage research, Rachel Springall, finance expert at Moneyfacts.co.uk, said: “There are now more lenders offering options than six months ago – back to a spread seen in March 2020 before lockdown began – but it appears that building societies are more inclined to provide deals to meet growing demand, whether for someone who uses their own home or takes out a new loan to fund the holiday let investment. According to a recent survey by Hodge Bank, out of those purchasing a holiday home, 65% take out a new holiday let specific mortgage and 35% remortgage their existing home to finance their holiday home.

“Supply and demand may well be a key issue in 2021 for investors who feel staycations are here to stay awhile yet, and indeed according to Rightmove, national new listings stock is down 25% year-on-year. Any lack of holiday home opportunities will come as frustrating news for investors considering the return of holiday let deals on to the market, especially as sales figures nationally are rising and some consumers have more disposable income from lockdown and are therefore ready to invest. Data from PropertyMark cited that one in nine properties nationally sell more than the asking price, with recent figures hitting a five-year high.

“Clearly, for any opportunities that prospective borrowers are contemplating, it is wise they approach an independent qualified financial adviser to go through the deals currently available and to get some valuable insight into the workings of a holiday let, including tax benefits, rules regarding residency periods, rental income desirability and requirements, and other potential expenses outside of utility bills.”

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The average house now costs £232,134 as house price growth slows

Annual UK house price growth saw a slowdown in March 2021, with house prices rising 5.7% year-on-year resulting in the average house price standing at £232,134, according to the latest Nationwide House Price Index.

The figures also show that house prices fell by 0.2% month-on-month, taking into account seasonal factors, which according to Robert Gardner, chief economist at Nationwide, could be due to the original stamp duty deadline. He said: “Given that the wider economy and the labour market has performed better than expected in recent months, the slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget.”

With the extension of the stamp duty holiday to the end of June confirmed in the Chancellor’s budget earlier this month, it is expected that this will have a positive impact on housing market activity over the next six months. Beyond this, however, Gardner warns is more uncertain, he explained: “It may be that the recovery continues to gather momentum and that shifts in housing demand resulting from the pandemic continue to lift the market. However, if the labour market weakens towards the end of the year as policy support is withdrawn, as most analysts expect, then activity is likely to slow nearer the end of 2021, perhaps sharply.”

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BTL mortgage deals at highest level since March 2020

The number of buy-to-let (BTL) mortgage deals available is at its highest level since the pandemic began impacting the UK economy in March 2020, but at the same time rates have risen to a two-year high.

Research carried out by Moneyfacts.co.uk found that there are now 2,333 BTL mortgage deals available to landlords, which is the highest number seen since March 2020 when there were 2,897 deals. While this has resulted in more choice for landlords, average rates have also risen during this time and the average five year fixed BTL rate now stands at 3.41%, its highest level since September 2019 when it reached 3.44%. Meanwhile, the average two year fixed BTL rate currently stands at 3.05%, and again this is the highest it has been in nearly two years, when it also stood at 3.05% in June 2019.

As the below table shows, year-on-year the average rates on both two and five year BTL mortgage deals at 60% loan-to-value (LTV) and 80% LTV have increased. Saying this, lower than average rates are available in the BTL mortgage charts, as Eleanor Williams, finance expert at Moneyfacts.co.uk, explained: “It is important to note though that these are averages, and therefore while representative of the market as a whole, there are some very competitively priced products available, with some – depending on LTV and criteria – available at below 2%. Therefore, those who are hoping to refinance or take on a new deal would do well to shop around.”

 

Buy-to-let mortgage market analysis
  1 March 2020 1 March 2021
BTL product count - fixed and variable rates 2,897 2,333
BTL two year fixed - all LTVs 2.77% 3.05%
BTL two year fixed - 80% LTV 3.56% 4.14%
BTL two year fixed - 60% LTV 1.89% 2.14%
BTL five year fixed - all LTVs 3.24% 3.41%
BTL five year fixed - 80% LTV 3.98% 4.29%
BTL five year fixed - 60% LTV 2.31% 2.52%

 

Along with the increase in rates, landlords may also be disappointed with our findings that show on the percentage of deals that offer an incentive, such as free valuations or no legal fees, has also fallen year-on-year. “Although interestingly, the proportion of the market where cashback is available has increased, not only year-on-year, but by 8% over the last month,” Williams revealed.

This means that although lenders have been withdrawing some incentives and increasing rates, there are still good deals available and landlords would be wise to check the BTL mortgage charts to see what is available and consider speaking to a mortgage broker who will be able to highlight the best deals for their individual requirements.

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The best residential mortgage rate 26.3.21

26th March 2021

First-time buyers will be pleased to see that competition within this market has increased over the last few weeks, with more lenders now offering mortgage deals for those with a 10% or lower deposit

First-time buyers will be pleased to see that competition within this market has increased over the last few weeks, with more lenders now offering mortgage deals for those with a 10% or lower deposit

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How to spring clean your finances

24th March 2021

Spring is now officially here and, especially after the financial impact of the past 12 months, this is the perfect time of year for consumers to take stock and give their personal finances a spring clean

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Remortgaging could help hard-hit homeowners lower monthly repayments

23rd March 2021

One in three mortgage borrowers who have faced financial hardship due to the pandemic are planning to revert to their lender’s standard variable rate (SVR) when their mortgage term ends

One in three mortgage borrowers who have faced financial hardship due to the pandemic are planning to revert to their lender’s standard variable rate (SVR) when their mortgage term ends

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The best residential mortgage rate 19.03.21

19th March 2021

Mortgage borrowers looking to lock into a new fixed rate deal will be pleased to see that that fixed deals across the charts have remain highly competitive this week

Mortgage borrowers looking to lock into a new fixed rate deal will be pleased to see that that fixed deals across the charts have remain highly competitive this week

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Two and five year mortgage rates hit historic lows

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Although the number of mortgage deals have almost halved since March, the average mortgage rates on two and five-year fixed deals have hit historic lows

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