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adarmo

First Time Buyers' mortgage squeeze

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http://www.marketoracle.co.uk/Article60558.html

The latest research from moneyfacts.co.uk shows that while the average two-year fixed mortgage rate has experienced an increase at all loan-to-values (LTVs) in the past month, rates at 95% LTV have been the hardest hit, showing a 0.10% increase from September compared to a 0.03% increase in the average rate at 60% LTV.two-year-fixed-mortgage.gif

AP rates rising following intense speculation about an imminent base rate rise, many providers are starting to factor in the extra cost. At 95% LTV, providers have an added element of risk if base rate does go up, as the probability of borrowers defaulting on their mortgage could increase. This needs to be factored in.

“When comparing the increases at 60% LTV to those at 95% LTV, the difference is stark. Providers are looking to remain competitive to those remortgaging and protect their mortgage books in the event of a rate rise, which is why rate rises at lower LTVs are being kept to a minimum.

“The combination of rates rising now and a potential base rate rise around the corner could see first-time buyers who’ve managed to get a deposit together having to deal with higher monthly repayments, which could eat further into their income, causing them struggle. Some borrowers turn to lengthening their mortgage term to combat these higher repayments, but this will cost them more in the long run.

“First-time buyers looking for a mortgage should shop around to get the best possible deal. Anyone considering getting onto the ladder in the future should try not to panic and seek advice from a financial adviser if they are unsure about their options.”

www.moneyfacts.co.uk - The Money Search Engine

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4 minutes ago, Nabby81 said:

FTB getting screwed over then 

I guess low LTV = low risk and vice versa. Not much of a change overall but interesting that one has fallen while the other has increase. 

I'm on an 85% LTV but 1.54% fixed for two years. took it out a few months ago so interesting to see these figures. 

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14 minutes ago, adarmo said:

I'm on an 85% LTV but 1.54% fixed for two years. took it out a few months ago so interesting to see these figures. 

I'm on 90% LTV 2.64% fixed for 2 years. Let's see how far rates can rise by the time I remortgage it.

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1 hour ago, adarmo said:

I guess low LTV = low risk and vice versa. Not much of a change overall but interesting that one has fallen while the other has increase. 

I'm on an 85% LTV but 1.54% fixed for two years. took it out a few months ago so interesting to see these figures. 

I wonder if this will push FTB to help to buy as they will get mortgages on 75% LTV with better rates. 

I used help to buy and was recently offered 1.39% on a 2 year deal and 1.85% of 5 years deal. I took the 2 years, then only last week change it to the 5 years.

 

 

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Could it be the lenders are pricing in a greater than 5% price drop but not as much as 40%.....the borrowers will always lose their money/equity before the lenders do.....;)

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2 hours ago, adarmo said:

I guess low LTV = low risk and vice versa. Not much of a change overall but interesting that one has fallen while the other has increase. 

I'm on an 85% LTV but 1.54% fixed for two years. took it out a few months ago so interesting to see these figures. 

I wouldn’t worry too much, now that DEBT is wealth you’ll be fine, you have status among DEBTslaves ?

 

It’s the rest of the mugs with zero DEBT against their name who will be first against the wall

 

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Rent to a degree might be a good way to judge affordability.....if it is for a reasonable length of time ie: more than the last six months and the information is bona fide.....truth is truth....fiction is fiction.;)

 

Other debt outstanding is the problem...no other debt less of a problem.

Edited by winkie

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2 hours ago, adarmo said:

I guess low LTV = low risk and vice versa. Not much of a change overall but interesting that one has fallen while the other has increase. 

I'm on an 85% LTV but 1.54% fixed for two years. took it out a few months ago so interesting to see these figures. 

What do UK 10 year fixes look like now rates wise? I always wished we could get reasonable 20-30 year fixed rates like the do in the USA.

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7 minutes ago, markyh said:

What do UK 10 year fixes look like now rates wise? I always wished we could get reasonable 20-30 year fixed rates like the do in the USA.

Go for it....life is a risk always has been, there are no guarantees.....gee hey anxiety will see you will fail....bite the bullet......who says anyone will get anything on our due pension date..... anything can happen.....and does.;)

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3 hours ago, markyh said:

What do UK 10 year fixes look like now rates wise? I always wished we could get reasonable 20-30 year fixed rates like the do in the USA.

There was a few 10 year fixes. Hsbc did them. They only lasted 12 months before they were pulled. Not sure why. 

5 year seems to be the max they do now.

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2 minutes ago, spyguy said:

There was a few 10 year fixes. Hsbc did them. They only lasted 12 months before they were pulled. Not sure why. 

5 year seems to be the max they do now.

Why would they encourage 10 year fixed transferable when they think could make more locking in for a shorter time knowing, sorry thinking rates will increase.....anyway the more renewals over a shorter period of time the more fees can be collected......think AST in rental terms.;)

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I don't think 90+% LTV is only for FTB. Have some friends who have jumped from first time type homes (2 up/down and flat) to 3 bed semi's in London and the cost of the houses have been huge.

We have decided to stay in our totally fine 2 up/down semi  (OK end terrace ?) and remortgage on a 5 year fix with no early repayment charges.

I think the next few years with Brexit is going to be carnage for most but some will be better prepared and placed for it.

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Just now, winkie said:

Why would they encourage 10 year fixed transferable when they think could make more locking in for a shorter time knowing, sorry thinking rates will increase.....anyway the more renewals over a shorter period of time the more fees can be collected......think AST in rental terms.;)

Not sure. If youve money to lend its best to lend it.

Better a smaller margun than losing business.

To be honest, hsbc are pretty tight on lending. Youre not going to lie on your income with them. Hsbc are the bank that likes to ay fux off to nationwide...

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2 minutes ago, spyguy said:

Not sure. If youve money to lend its best to lend it.

Better a smaller margun than losing business.

To be honest, hsbc are pretty tight on lending. Youre not going to lie on your income with them. Hsbc are the bank that likes to ay fux off to nationwide...

Losing business......doubt that enters the equation.....brand new customers get the best deals, even energy companies give their existing customers the poorer deals new customers are more valuable, better deals for new at the expense of their existing customers, even pay others for that new business...;)

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Does the Moneyweek table factor in the ridiculous application fees? They can vary from nothing to £2k and can potentially make a mockery of saving .1%. Definately a DYOR topic

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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