Lenders battle for custom with record low interest rate

April 28, 2017 by Brendan

Lenders

The introduction of a fixed rate mortgage deal with a record low interest rate is a sign that lenders are prepared to do battle for custom.

A rate of 0.89% has been released by the Yorkshire Building Society. However, experts warn that it is crucial to read the small print carefully, which is something that a CeMAP qualified mortgage adviser can help with. According to expert opinion, the deal may not be suitable for that many homeowners, as it requires a large deposit, a large fee and the rate could potentially change.

As property sales remain the same, lenders are seeking custom and are offering potentially good deals to do so. According to the latest data released by HMRC, there has been close to 100,000 property sales every month over the last three years. The only exception has been March 2016, when there was a surge in house purchases prior to the new stamp duty surcharge being introduced, when the figure reached 173,860.

The Council of Mortgage Lenders stated that the housing market was in “neutral gear”, although the fall in numbers of home movers had been cancelled out by the small increase of first time buyers. Due to the “neutral gear” of the property market, lenders have been offering attractive deals, which are often fully subscribed within days, and then withdrawn. Experts believe that the deal offered by Yorkshire Building Society would be most suited to a buyer with a deposit of around 35%, who is looking for a large loan.