February saw a surge in mortgage availability, with the best offerings since August 2022 cropping up – and that’s not all. Fixed-rate mortgages at below 4% have made their way back onto the market for first time since September of last year! now is an ideal moment to explore what could be possible; read on and find out more!
Mortgage availability has now fully recovered after the disastrous effects of the autumn mini budget which saw a steep rise in interest rates and many mortgage deals being withdrawn from the market.
Banks and lenders are rolling out increasingly competitive mortgage deals as the housing market begins to cool – with Virgin Money offering a 10 year fixed-rate loan lower than Bank Rate, followed by HSBC launching an impressively low 5 year fix of 3.99% for customers remortgaging or borrowing up to 60% value on their property.
In October following the mini-budget average two-year deals measured 6.65%, but this figure reduced to a remarkable 5.36% last Friday 10th February – that’s almost a full percentage off! The five-year deal has seen even greater drops of over half a percent since early 2023 down to its current rate of 5.08%.
To put this into context, on a £200,000 mortgage over 25 years, the typical borrower today would now spend £51 a month less on a two-year fixed rate than someone who was on a fixed rate at the start of January, and £65 less a month on a five-year fixed rate- that’s some big savings!
Buyer demand remains low
MoneyFacts saw a huge surge in mortgage numbers at the start of February, with over 700 additional offerings compared to January – the highest increase since August 2022!
However, buyer demand still remains low with mortgage approvals for home buying at the end of 2022 falling to 35,612– the lowest number on record since January 2009 amidst the financial crisis.
Due to the fall in annual house prices many lenders are still reluctant to re-enter the market for first-time buyers with smaller deposits. This is further reinforced by the end of the Help to Buy scheme which concluded new sign ups in October 2022. The scheme supported over 50,000 first-time buyer purchases on new build properties with a 5% deposit.
That being said it’s not all doom and gloom for first-time buyers, low-deposit deals have increased from a month ago with:
- 539 deals on offer for those with 10% deposits.
- 149 deals on offer for those with 5% deposits.
So what does this mean for 2023?
Rachel Springall, finance expert at MoneyFacts says: “It’s encouraging to see fixed mortgage rates coming down for borrowers looking to secure a new deal.
A five-year fixed rate mortgage is a great choice for those looking for peace of mind to fix their monthly repayments.
“Due to the unpredictable nature of the mortgage arena, it is imperative that both those looking to purchase a property or who wish to refinance seek independent advice from a broker to navigate the options available to them.”
If you would like to speak to Jeni in mortgages please do get in contact with us.
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