Life returns to fees free mortgages!

After months of Credit Crunch related doom and gloom in the mortgage market the clouds are finally parting with signs that a number of major providers are reducing interest rates and giving new cause for optimism to remortgagees and home buyers.

Whether you are re mortgaging an existing property or looking to buy a new home, there are a number of new competitive deals as Simon Foster discusses.

The media would have you believe that it is near impossible to secure a mortgage since the Credit Crunch began last year, however many of the leading providers are lowering their rates in a bid to attract those buyers with deposits and good credit.

What do the new rates mean for you?
If you are lucky enough to have a 25% deposit or 25% equity in your existing home then you can now enjoy rates that are as competitive as those seen before the credit crunch hit. Abbey last week announced that their tracker rates have dropped to just 0.69% with no legal or valuation fees if you are remortgaging. If you are buying a new home then Abbey also offers a 'Homebuyers Solutions' package to help cover your legal and valuation fees.

If you aren't able to provide a 25% deposit then all is not lost as rates are also coming down on 90% mortgages. Halifax has dropped their 90% tracker mortgage rates from around 7% two months ago to 6.39%. They are also returning to 95% mortgages although the rates are still relatively high at this level.

It seems impossible to second guess the short term direction of interest rates. Base rate reductions have been placed on hold until inflation dampens down but industry, retailers and housing experts are all calling for action from the Bank of England. Against this backdrop Woolwich have launched a scheme for those concerned about interest rate movements and are offering an interesting tracker rate that will mirror the base rate yet also allows you to benefit from a penalty free switch to a fixed rate if the markets move against you and you want to lock in your payments.

War of the providers
Mortgage providers are competing to attract borrowers with a deposit or equity of 10% or more and if you have a good credit score then so much the better. Halifax, Woolwich and Abbey are falling over themselves to attract clients and as a result they have entered into a price war to rival the supermarkets!

This offers an unexpected opportunity for buyers to secure a competitive rate on their mortgage.

The only way is up!
Despite reports in the media about the lack of mortgages available to prospective buyers, the mortgages are out there, it is just a case of understanding the options. Best buy tables only tell part of the story as punitive admin costs and hidden criteria can often make these comparison tables a very dangerous way to source a mortgage. If you would like to speak us about your options , call us on 0845 062 8888 or email simon@contractorfinancials.com

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