The best UK mortgage deals of the week

About 1.6 million existing borrowers have relatively cheap fixed-rate mortgage deals expiring this year. (Christopher Furlong via Getty Images)

Mortgage rates were virtually unchanged this week, but prospective homeowners are still struggling to find affordability and more people are taking out loans well into retirement.

According to Uswitch, the average two-year fixed interest rate this week was 5.89%, the same as before, and the average five-year fixed interest rate was 5.35%, slightly lower than last week's 5.39%.

This follows the Bank of England's decision to keep UK interest rates at 5.25% for the sixth consecutive year, the highest in 16 years.

Read more: Number of UK homes for sale hits eight-year high

With fewer BoE rate cuts expected in 2024, lenders appear divided on where mortgage rates will move, with increases and cuts across the six major lenders.

“Mortgage rate movements have been mixed over the past week, with Natwest increasing rates on some products last Wednesday and only Barclays, Santander and TSB announcing cuts on some products this weekend,” said Kellie Steed, mortgage at Uswitch. . an expert told Yahoo Finance UK.

“However, this had little impact on average overall two-year and five-year fixed mortgage rates, which remained roughly the same as the previous week apart from a slight decline in the latter. With the UK election looming on 4 July, markets There will be confusion.”

Read more: How will the general election affect your finances?

Meanwhile, young homebuyers are being forced to gamble with their retirement prospects by taking out ultra-long-term mortgages.

Over the past three years, researchers have noted a surge in mortgage terms that could see homeowners locked into their mortgages beyond state pension age. This is particularly prevalent among people under 30, data from the BoE highlights.

Meanwhile, new data shows UK lenders approved fewer new mortgages than expected last month.

The latest figures from the BoE show that the number of mortgage approvals fell slightly from 61,300 in March to 61,100 in April, while the number of remortgage approvals also fell from 33,500 to 29,000.

The story continues

However, the amount borrowed by individuals increased from 500 million won in March to 2.4 billion won.

The real interest rate on new mortgages rose 1 basis point to 4.74%.

“Although negligible inflationary pressures and the impending general election make an imminent rate cut less likely, the effective interest rate on newly issued mortgages rose 1 basis point to 4.74% in April, a sign of continued affordability difficulties for buyers. It was clear.” said Alice Haine, personal finance analyst at Bestinvest.

“Mortgage balance rates also rose seven basis points to 3.57% as more people cut out of the cheaper fixed rate deals they secured before the start of the BoE’s cycle of rapid rate hikes.

“With interest rate cut chatter dominating the mindset of most mortgage borrowers, those looking to buy their first home or refinance an existing product may be left wondering what to do next. Those who are unsure may have to wait for up to six months. It’s important to remember that you can finalize the deal, giving you the option to switch to a better rate before your new mortgage term begins,” she added.

HSBC Mortgage Interest Rates

Borrowers have long said goodbye to HSBC (HSBA.L) 3.99% on five-year contracts. The cheapest deal on the lender's table is now 4.40% for five years, the same as before.

If you look at the 2-year option, the lowest interest rate is 4.79% and the fee is 999. There is no change from last week's price.

In both cases, a 60% loan-to-value (LTV) mortgage is assumed. This means buyers must have at least 40% as a deposit.

The lender offers 95% LTV deals. This means you only need to save a 5% deposit. However, the rates are much higher: 5.79% for a two-year fixed and 5.30% for a five-year fixed.

Read more: When do interest rates fall and what should you do?

This is because the interest rate someone can receive is determined by his or her financial situation and the size of his or her savings. The higher the deposit, the lower the LTV and the easier it is for the buyer to access better deals because lenders view the deal as less risky.

NatWest Mortgage Rates

NatWest (NWG.L) has made some changes to its mortgage rates, but none of its offers come close to its previous 3.94% deal.

Currently, the highest interest rate a potential borrower can get is an online-only deal offering 4.32% on a five-year contract with a fee of 1,495, assuming a 60% LTV. However, after five years, this percentage nearly doubles to 8.24%.

Read more: How to Protect Your Finances During Divorce

This product offers a 4.42% green mortgage available for properties with an Energy Performance Certificate (EPC) rating of A or B, with a reduced fee of 995.

For a two-year fix, the lowest price customers can get is 4.82% online, with a product fee of 1,495, the same as last week.

Santander Mortgage Interest Rates

Santander (BNC.L) also moves away from mortgages below 4%, offering a five-year fixed rate of 4.38%, assuming a 40% deposit.

Applying a purchase fee of 999 to a 60% LTV 2-year fixed rate becomes 4.80%. The purchase fee of 999 on a 75% LTV 2-year fixed rate is set at 4.88%, down from 4.58% last week.

Barclays Mortgage Rates

Barclays (BARC.L) has the cheapest five-year contract for potential homebuyers with a 40% deposit (60% LTV) and a fee of 899. The commission was 4.17%. The lender no longer increased the interest rate on that transaction to 4.34%. Still, it has remained at that level for several weeks now.

Read more: Top tips for investing in real estate and features for selling your home

For a two-year mortgage deal, the lowest interest rate is 4.90%, up from 4.84% last week.

National Mortgage Rates

At Nationwide (NBS.L), five-year purchase fixed rates start at 4.59%, with a 999 fee charged to borrowers with a minimum 40% deposit. No change from last week.

Assuming you need to borrow 180,000 of the 300,000 homes, your monthly payment would be $1,009.72.

The two-year equivalent interest rate starts at 4.84% and remains unchanged.

Halifax Mortgage Interest Rates

Halifax, the UK's largest mortgage lender, has cut its two-year and five-year fixed rates for home borrowers by up to 0.19 percentage points.

The lender, owned by Lloyds (LLOY.L), is offering a two-year fixed rate of 4.78% plus a 999 fee to first-time buyers. It was lower than the previous 4.96%.

The five-year equivalent interest rate starts at 4.45% (LTV is also 60%), which is down from 4.62% last week.

It also offers a 10-year contract with a mortgage interest rate of 4.93%.

Read more: UK inflation fell to 2.3% in April, closer to the Bank of England's target.

Nicholas Mendes, Marketing and Mortgage Technology Manager at John Charcol, said: Halifax's latest price adjustments reflect current sentiment among lenders.

[The latest] Unfortunately, inflation data means the market is pricing in the long term, which means mortgage rates will remain at their current levels for a bit longer.

It is important to note that until bank rates are officially reduced, lenders will have a mixed attitude. Companies with smaller pipelines may be more aggressive in implementing reductions.

Cheapest mortgage deals on the market

Mortgage rates below 4% are out of the market, making it harder for prospective homeowners to say they've secured a good deal.

The 4.32% deal offered by NatWest appears to be one of the cheapest rates available, but it requires a 40% deposit so you'll need a huge amount of cash up front to secure the deal. Barclays has a 4.34% interest rate on a five-year contract.

Read more: Which first home buyer scheme is right for me?

Given the average UK house price is 261,962, a 40% deposit equates to approximately 105,000.

Banks say borrowers will have to spread their mortgages over 70 years to cover the same mortgages that were offered just two years ago.

There's also a new mortgage product available to help first-time buyers get on the property ladder with just a 5,000 deposit.

Yorkshire Building Society is offering a deal that allows first-time buyers across England, Scotland and Wales to purchase properties worth up to $500,000 with a deposit of just $5,000.

This means first-time buyers can rank with as little as a 1% deposit.

Will mortgage rates fall in 2024?

Mortgage rates rose significantly as the BoE raised interest rates to the highest level in 16 years to tackle inflation.

By now, interest rates have peaked and the consensus is that banks will begin to cut rates in 2024 as inflation eases.

But inflation has slowed less than expected, prompting City investors to lower their forecasts for how much the BoE will cut interest rates this year. Traders are now pricing in just one or two rate cuts, compared to expectations of five in early 2024.

If the BoE cuts interest rates this year, mortgage rates will fall, but not as much as expected in 2024.

About 1.6 million existing borrowers have relatively cheap fixed-rate deals expiring this year.

WATCH: Halifax cuts mortgage prices despite inflation despite hopes of Bank of England interest rate cut in June.

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Sources 1/ https://Google.com/ 2/ https://uk.finance.yahoo.com/news/best-mortgage-deals-uk-interest-rates-120404502.html The mention sources can contact us to remove/changing this article

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