Figures revealed by The Bank of England show that new homeowners and first time buyers can now receive the lowest interest rates in the last six years! If you are some of the hundreds of people in the UK trying to get on the property ladder, you can now look forward to the cheapest interest rate levels in fixed-rate home loans for six years. The Chelsea Building Society, Co-Operative Bank and Northern Rock have all revealed competitive deals.
The 2 year fixed-rate deal has fallen to 3.88% on average for February 2010, this comes as the the lowest rate since July 2003. As well as this, there was also a fall in the average cost of a 5 year fixed rate mortgage, this fell from 5.49% from 5.56% the previous month, a change of 0.07%.
Existing customers could choose to remortgage their properties with the falling interest rates. The reason that they have fallen is that lenders have competed to attract good-quality borrowers.
First Time Buyers and New Homeowners
The Mortgage Works is an innovative new range of guarantor home loans from part of the Nationwide Building Society group.
There are schemes that relieve some stress on first time buyers and new homeowners. One of these is to allow parents or relatives to be financial responsible for a proportion of a borrower’s mortgage. This will remove the risk of backing the entire loan. It requires the applicant to be able to afford at least 70% of the repayments on there loan, while the guarantor must be able to make up the remaining 30%. There is also a 10% cushion.
A different approach has been taken by Halifax, with their “Lend a Hand” deal, giving first time buyers a stronger chance of getting their foot in the door. It means that a buyer can now borrow up to 95% of the value of the property. However, this must be backed by a parent or relatives savings. The demand for mortgages in recent times has meant that deals like this are becoming a more common reality for banks and building societies, providing a different kind of service for borrowers.
First time buyers now have a choice in how they approach trying to obtain a mortgage, like small deposits such as the schemes above.
Another approach a first time buyer may take would be a shared equity scheme that can help when buying an apartment or house. The Hub in Manchester provides such a scheme, where you can buy a studio, 1 bed, 2 bed or 3 bed apartments in Manchester.
Want to find out more about Manchester apartments for sale, then contact Sinead Jones at The Hub Manchester for more information.