Recent research from the Council of Mortgage Lenders shows that around 1.8 million borrowers are currently sticking with low Standard Variable Rates, but with fears of a second credit crunch looming, experts in this weekend’s financial press urged homeowners to consider securing a mortgage deal while they still can. The Telegraph reported that the average 2 year fixed now stands at just 3.52%, but with some SVR’s as low as 2.5%, the age-old dilemma remains over whether to switch now or not. A borrower’s level of equity is of course a major factor in getting a good deal, and the Times revealed that as many as 900,000 homeowners could be trapped on a variable rate due to low levels of equity or changes in lending criteria which leave them unable to move. Once again the advice is to overpay wherever possible to reduce the debt and open up a wider choice of new mortgage deals. For those who have the choice but cannot decide, the Sunday Mirror looked at ‘hybrid’ deals such as a track then fix option.
The Sunday Telegraph highlighted current discrepancies in lending criteria regarding maximum age, which mean that a borrower in their 40s could struggle to get a mortgage with a 25 year term, despite the scrapping of the default retirement age. Experts reported that some lenders do in fact lend up to a maximum of 70 or 75, but choice is limited, with many not lending beyond 65. With the average age of the First Time Buyer now at 38, this could cause problems for thousands in the future. Borrowers are advised to consider some of the smaller building societies, who often have a more flexible approach to lending.
Elsewhere the Financial Times revealed that high street lenders are competing aggressively in the large loan market by increasing their maximum loan sizes, the Telegraph looked at the benefits of offsetting, and the Sunday Times gave advice to both First Time Landlords and Professional Landlords looking to increase their property portfolios.
