Mortgage update: Record low rates still available but for how long?

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Our mortgage partner, Hamilton Fraser Total Landlord Mortgages provides the latest monthly mortgage report and explains how the current interest rates may affect landlords.

Last week, bank policymakers voted in favour of no change from the current 0.1 per cent interest rate (7-2) which is good news for those still looking for a mortgage.

Although, the Bank’s Monetary Policy Committee did not rule out a rise at the next meeting in December 2021. The official base rate still stands at 0.1 per cent but the Government’s financial watchdogs have warned that time is running out for landlords looking for cheap mortgage deals.

Call Total Landlord Mortgages today on 0333 244 8918 or request a callback today.

The office of budget responsibility expects inflation could peak at 5.4 per cent by April 2021, which in turn would force the Bank of England to raise base rates to at least 3.5 per cent from the current record low of 0.1 per cent.

Experts say that in line with the increasing energy costs and wages, mortgage payments will rise it is just a matter of when.

Soaring interest rates would pile on the agony for landlords as mortgage costs would go through the roof.

Now is your chance to find a great deal if you are looking for a mortgage or to re-mortgage. Call Total Landlord Mortgages today on 0333 244 8918 or request a callback to discuss your bespoke requirements.

Lenders pulling cheap deals

A borrower with a £150,000 loan over 25 years could see monthly repayments rise from £759 to £1,060 if the current gap between the standard variable rate charged by lenders and the bank’s interest rate stays the same.

Sub one per cent mortgage deals are still available – but probably not for long. Buy to let lenders may pull rates at short notice. Request a call back from Total Landlord Mortgages today while these great offers are still available.

The crucial question is whether the media is simply scare-mongering in the wake of the office for budget responsibility report (OBR) or if mortgage rates are in fact on the way up.

At this stage, the office for budget responsibility report is based on ‘what if’ the inflation rate soars and is not a guarantee that rates will increase.

Economists forecast that inflation will rise – possibly as high as 4.6 per cent in April – but no one knows for sure, and one thing recent history has shown is that things can change for the better or worse very quickly.

The only way for interest rates is up

It wasn’t long ago that Chancellor Rishi Sunak and the OBR expected the economy to bomb after the coronavirus pandemic. Yet, in his recent budget announcement, Sunak told MPs the country’s finances were responding better than expected and are likely to keep doing so for the next 12 months, with economic growth of more than six per cent.

The reality is that bank rates will rise, and unfixed mortgages will go in the same direction. Some lenders have already stopped offering their low-interest loans or simply hiked the rates, while others seeking market share are hanging on with rock-bottom rates to see what happens.

As a reminder, mortgages are not always about the interest rate; Halifax has raised the affordability ceiling on home loans to 5.5 times income.

Specialist lender Paragon has doubled maximum borrowing from £5 million to £10 million for portfolio landlords (identified as landlords with more than four buy to let homes with a mortgage).

And the most a landlord can borrow against an individual property rises from £2 million to £4 million.

Contact Total Landlord Mortgages on 0333 244 8918 to let us help you find a top market product before the potential rise in mortgage rates is introduced.

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