The Bank of England today opted to hold the base rate at a record low 0.1% in order to support the post-pandemic recovery.
The mortgage market remains busy – there were 86,900 loans approved for house purchase in April compared to 73,400 in February 2020, before the onset of the pandemic. Lenders are demonstrating their confidence in the economy by introducing new products at a rate of about 80 a week.
To understand more about why, here are three things you need to know about the mortgage market right now.
1. Choice is improving
There are now 4,243 mortgage products available, the highest level since the onset of the pandemic, according to data from Moneyfacts.
Those with smaller deposits, often first-time buyers, will welcome news that their options are improving rapidly. This group saw the largest uplift in product choice in June, with 80 new products introduced.
2. New products are coming for buyers with smaller deposits
Newcastle Building Society will be the first lender to offer 95% mortgages to buyers of new-build homes under a new mortgage indemnity scheme developed with the Home Builders Federation (HBF) and its members.
The scheme will initially be available as a pilot on selected plots in the North East of England through four participating house builders; Barratt Developments, Bellway, Keepmoat and Vistry. As the first lender in the scheme, Newcastle Building Society has announced a range of mortgage rates under Deposit Unlock, starting at 3.50% for a two-year fixed rate mortgage. The scheme will roll out to the rest of the UK in the coming months.
This scheme joins the Government’s 95% mortgage guarantee scheme and the revised Help To Buy Equity Loan, which both launched in April this year to support buyers in getting a foot onto the property ladder.
3. Rates hit all time lows for those with large deposits too
Mortgages rates have dropped further in recent months amid the brightening economic outlook. In May, the latest month for which data is available, average rates at 60% LTV on a two year fixed basis dropped to 1.20%, according to the Bank of England. That’s the lowest they’ve ever been.
Some lenders have even launched eye-catching deals at less than 1%.
Want to know more about the very latest mortgage products? Knight Frank Finance covers the whole of the market, enabling our brokers to find you the best offers available for your circumstances. If you’d like to secure a better rate, please get in touch.