How to get the best deal on your mortgage

PUBLISHED: 09:38 30 October 2017 | UPDATED: 10:26 30 October 2017

Navigating the mortgage minefield is no easy task [PA Photo/thinkstockphotos]

Navigating the mortgage minefield is no easy task [PA Photo/thinkstockphotos]

Archant

Lenders have been raising their fixed mortgage rates in recent weeks – but it’s still possible to get a good deal. Vicky Shaw found out how...

What’s happening?

Mortgage rates being offered by lenders have crept up in recent weeks, with dozens of providers upping their rates between mid-September and mid-October.

What’s the background?

There have been hints that the Bank of England’s base rate could soon edge up from its low of 0.25 per cent.
Charlotte Nelson, a spokeswoman for financial website Moneyfacts.co.uk, says that, amid the speculation about a possible base rate rise, swap rates, which lenders use to price their loans, have been heading upwards. She says: “Swap rates have started to increase, which has caused lenders to rethink their offerings.”

Who’s affected?

David Hollingworth, from broker London & Country Mortgages, says several larger and smaller lenders have been increasing the rates they are offering, with some ultra-low fixed-rates being pulled off the market altogether. “This acts as a reminder that those rates won’t stay that low forever and actually they’re already on the move,” he explains. 
The rate increases have also been made across large chunks of lenders’ ranges, he says, so people with bigger and smaller deposits could be affected. 
Hollingworth adds: “Right the way through the loan-to-value range now, from the lowest of the low right the way up, you’re seeing increases in fixed rates.”

Does that mean the deals on offer are now quite poor?

By historic standards, the mortgage rates on offer are still very low, so there are still many good deals out there. 
Hollingworth says: “The rates are still very, very low,” but “the very lowest rates are rapidly disappearing.
“I think this is something that will trigger people to take action if they haven’t already, because they are going to miss out on the very lowest rates potentially,” he says, “but there’s still a lot of competitive rates out there, so it’s not too late if they are able to get their skates on.”

What’s the best length of time to fix my mortgage rate for?

This will depend on individual circumstances and how far into the future you feel comfortable locking yourself into a deal for.
A longer term fixed deal means you have certainty over your mortgage payments for a longer period, but a shorter term deal may have a lower rate, and will also free the borrower up more quickly if their circumstances change in the future - so the pros and cons need to be carefully weighed up.


Shorter-term deals may last for a couple of years, or longer-term deals may last for five, or even 10 years if you feel happy locking yourself into a deal for the next decade.
Hollingworth says that a possible base rate on the horizon could mean more people locking themselves into fixed-rate deals to insulate themselves from potential interest rate rises.

He says: “The question will be whether they go for the very cheapest rates, which are the shorter-term fixes, or consider longer-term.”
For borrowers wanting longer-term certainty and weighing up whether to go for a five or 10-year deal, Hollingworth suggests a possible compromise could be a seven-year fix, with Coventry Building Society having brought out these deals.

What else should borrowers consider?

When choosing the right mortgage, Hollingworth says it’s important to factor in any fees as well as incentives, such as cashback or free legal packages, as well as the rate.
He adds that if people are nearing the end of their current mortgage deal, some lenders will make mortgage offers which are valid for up to six months, so they could consider trying to lock into a deal now which they may not start for half a year.

Latest South Hertfordshire Property News

Yesterday, 14:32

St Albans homeowners are being urged to bring their price expectations in line with the current climate in order to secure a swift sale.

Read more
Yesterday, 08:48

Following the closure of two mental health hospitals in the 1990s, the Highfield area of St Albans has evolved into a safe, suburban neighbourhood that is hugely popular with families.

Read more
Thu, 11:27

Whether you’ve stopped buying paper books or can’t stop buying them, you’ll probably have some overflowing shelves somewhere in your home. What should you do if your collection’s taking up too much space?

Read more
Wed, 13:00

Positioned on a private and secluded plot, this imposing family home offers substantial and impeccably-presented accommodation arranged over four floors.

Read more
Wed, 08:06

From pumpkin farms to fallen leaves, our columnist has been enjoying all that autumn has to offer...

Read more
Tue, 13:40

We’re a nation of landline-using, bathroom carpet-owners who haven’t updated our homes in years, new research has revealed.

Read more
Tue, 11:23

As any country-wide property-watcher can confirm, most parts of The North are vastly more affordable than Hertfordshire. Having just spent a lovely weekend in Leeds, I’m wondering why.

Read more
Mon, 09:42

A house in St Albans was one of Zoopla’s most viewed property listings during October.

Read more
Friday, November 10, 2017

Situated to the north-west of Harpenden, Kinsbourne Green is a peaceful hamlet with its own distinct identity.

Read more
Thursday, November 9, 2017

After much speculation, interest rates went up last week for the first time in more than 10 years.

Read more
Thursday, November 9, 2017

Tenants are leaving London in record numbers, priced out by the rising cost of renting - and more and more are coming to St Albans.

Read more
Wednesday, November 8, 2017

This substantial Grade II listed character home is located in the heart of St Albans’ old conservation area.

Read more
Wednesday, November 8, 2017

Temperatures have taken a chilly turn, and as we dig out our hats and scarves we should spare a thought for the effect the cold may have on our homes and gardens.

Read more
Tuesday, November 7, 2017

Excellent schools and sought-after streets are just two of the things residents love about the Marshalswick area of St Albans.

Read more
Monday, November 6, 2017

Continued pressure on housing means garden developments are becoming increasingly common. However, before you start the work there are some key legal issues you’ll need to consider.

Read more
Monday, November 6, 2017

Vegetable oil could become the heating of choice for more than 4,000 Hertfordshire homes by 2022, according to a new report on the future of rural heating.

Read more
Friday, November 3, 2017

Shrubs producing a feast of vibrant berries could be just the boost a drab winter garden needs, says Hannah Stephenson.

Read more
Friday, November 3, 2017

Bonfire Night should be an enjoyable occasion, but with flames and fireworks in the mix things can easily get out of hand.

Read more
Thursday, November 2, 2017

The season of all things spooky is now over, and it’s been interesting to see how increasingly willing we are to embrace it in – and, for that matter, on – our homes.

Read more
Thursday, November 2, 2017

Christmas is coming and Alison Wildon and Karen Francis of LifeWorks are helping homeowners get their properties prepped and ready in time for the big day.

Read more
Wednesday, November 1, 2017

This six-bed detached home is packed with features, including three en-suites, 
a games room and a double garage that could easily be used as guest or au pair accommodation.

Read more
Wednesday, November 1, 2017

Alastair Woodgate, director of St Albans and Watford-based chartered surveyors Rumball Sedgwick, gets to the root of the problem.

Read more
Tuesday, October 31, 2017

Does the thought of living on Coffin Close or Deadman’s Lane send a shiver down your spine?

Read more
Tuesday, October 31, 2017

New affordable homes are to be built in St Albans for local people in housing need.

Read more
Monday, October 30, 2017

Fears about trick or treaters damaging property can spoil Halloween for homeowners.

Read more
Monday, October 30, 2017

Lenders have been raising their fixed mortgage rates in recent weeks – but it’s still possible to get a good deal. Vicky Shaw found out how...

Read more
Friday, October 27, 2017

October 31 is less than a week away, and Gabrielle Fagan is getting organised by dipping into a witch’s brew of interiors tricks and treats

Read more
Friday, October 27, 2017

A charming village filled with beautiful buildings, there’s lots to like about Markyate.

Read more
Tuesday, October 24, 2017

St Agnells Farm is an attractive residential holding with an impressive Grade II listed manor farmhouse, located on the northern outskirts of Redbourn.

Read more
Monday, October 23, 2017

We all love to judge the house-buying decisions of others, which may explain the interest in our recent feature on St Albans’ most prestigious streets.

Read more

HERTS AD PROPERTY E-EDITION

Image
Read the Herts Ad Property e-edition E-edition

NEWSLETTER SIGN-UP

Get the latest St Albans and Harpenden property news and features straight to your inbox with our regular newsletter

I am also happy to receive other emails...
Fields marked with a * are mandatory
Email Marketing by e-shot

MOST READ

search


e.g. Oxford or NW3
Powered by Zoopla

Local business directory

Hertfordshire's trusted business finder