MONEY MATTERS by Scott Woods of Bingham-Woods Independent Financial Advisors, Spalding
There may never be a better time to buy a house, claim analysts after official figures showed mortgages rates have almost halved over the past year. A £200,000 mortgage is more than £100 a month less expensive than 12 months ago, according to Bank of England (BoE) data. Mortgage brokers believe home owners may never again experience such cheap loan deals, with interest rates expected to rise in future. Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “The next six months are shaping up to be the best-ever window to secure a low interest rate if you are looking to buy or re-mortgage. “Today’s prices have never been bettered in modern times and given that a Bank Rate rise is inevitable at some point, it is unlikely they will be surpassed in the years ahead.” The BoE data showed that the average two-year variable rate had fallen from 2.76 per cent to 1.64 per cent for someone with a 25 per cent deposit. On a £200,000 loan, the monthly repayments would be £813 before fees, down from £924. Lenders are also unveiling cheaper fixed-rate deals which allow customers to lock into cheaper repayments lasting for up to a decade. For example, someone with a 25 per cent deposit would find that the average two-year loan rate had fallen from 2.37 per cent to 2.01 per cent, while the average five-year rate was down from 3.45 per cent to 3.09 per cent as the BoE noted a re-emergence of ten-year deals. In fact, two-year rates are tipped to dip below 1 per cent for the first time in contrast to the start of BoE mortgage records 20 years ago when the average two-year loan cost 8.38 per cent - more than seven times as much as today’s best deals. Please remember that your home may be repossessed if you do not keep up repayments on your mortgage, so whole-of-market, independent advice is vital.