Major UK Banks Battle over 4% Mortgage Rates

Santander has announced a two-year and five-year fixed rate mortgage, at a rate of just 3.99%. This is the first one to be put on the market since November last year. The Bank of England cut the base rate last week, fuelling hopes that the rate is going to drop even more. Santander has said that they may be dropping the rate on several other mortgage products as well, which is causing people to look into selling their homes, in an attempt to move up the property ladder.

A Surge in Property Sales

When news like this hits, there is usually a surge in property sales. Search terms that include buy my house for cash also spike, as people look to capitalise on the new mortgage rates by purchasing a new property and selling their old quickly. Options like online house-buying companies are especially useful for those who are looking to sell their house in a very short time frame or want a guaranteed sale if, for example, there is another property they have their eye on.

With new deals now available to those looking to remortgage as well, the UK property market is set to undergo a monumental change with the recent rate cut reversing market anxiety. Even though property sales are set to surge, banks have warned that new mortgage products are going to come with a higher-than-normal fee. People can expect to pay up to £2000, a sharp increase in the average fee of £1000.

Borrowers will need to do their sums, especially if taking out a new mortgage to capitalise on the current rate. Within a matter of hours after Santander made their announcement, Barclays also launched a 3.99% mortgage rate that comes with a 5-year fix. Although this comes with a lower fee of £899, it is only available for homes that have a 60% LTV rate.

Exploring the Latest Offers

The latest offers of 4% appear to be only available to those who want a low LTV. First-time buyers appear to be locked out of this deal, and won’t be able to take advantage of it as easily. The main reason for this is that they normally require an LTV rate of 90% or 95% and therefore won’t be able to take advantage as easily. The news of further mortgage rate cuts is welcome news for those who are coming out of a fixed rate deal this year, though. While it is encouraging to see lower rates, it would be great to see more competitive LTV deals that may well help first-time buyers get their foot on the property ladder.

In some parts of the market, the number of mortgage deals that cater to borrowers who have just a 5% has risen. This is great news for the market, and it goes to show how much of an impact things like this are having on the property market. With new deals emerging all the time, it seems that things are finally taking a positive turn for the UK property market and that buyers are looking to capitalise quickly before the offers come to an end.

Industry analysts recommend that the next few months will witness further movement in mortgage rates as lenders react to shifting market conditions and competition becomes more intense. Homeowners and potential purchasers are encouraged to remain up to date-and shop around with various lenders to get the best terms for their situation. Although the trend is positive at present, financial experts warn that external factors like inflation and economic policy will continue to impact the long-term direction of the housing market. Purchasers must consider all expenses, such as arrangement charges and future rate adjustments, before signing a mortgage agreement.