Latest news with #L&CMortgages
Yahoo
09-05-2025
- Business
- Yahoo
Tracker mortgage holders could save nearly £350 a year following rate cut
The average homeowner on a tracker mortgage will see their monthly repayments fall by nearly £29, after the quarter-point snip to the Bank of England base rate. UK Finance said homeowners on tracker deals will typically see their monthly repayments reduce by £28.97, based on balances outstanding. This could add up to a saving of nearly £350 over the course of a year. People on a standard variable rate (SVR) mortgage could see their monthly payments fall by £13.87, assuming that their lender passes on the base rate cut in full, which could add up to a saving of nearly £170 over a year. Mortgage holders may end up on an SVR when their initial deal ends and the rate is set by individual lenders. The Bank of England cut the base rate to 4.25 per cent on Thursday, from 4.5 per cent, following a slowdown in inflation in recent months. Many lenders have been chopping rates in recent weeks, including several offering deals at sub-4 per cent levels. Around 85 per cent of outstanding mortgages are fixed rates – and homeowners on these deals will not see their rates change until they move onto a new deal. According to UK Finance's figures, 1.6 million fixed-rate mortgage deals are due to end, or have already ended, at some point in 2025. David Hollingworth, associate director at L&C Mortgages, said: 'The good news for fixed-rate borrowers coming to the end of a deal is that rates have been falling. 'That's because today's cut was so widely expected that it's already allowed lenders the chance to improve their rates. There's still plenty of tweaking of rates in the market but fixed rates are looking to predict what will happen rather than react to base rate movement.' Rachel Springall, a finance expert at said: 'The driving force behind the recent falls (in mortgage rates) has been volatility in swap rates, with lenders rushing to pass on cuts to fixed rates in their range. 'This momentum has led to the average two-year fixed rate dropping to its lowest point since September 2022.' Two-year fixed-rate, 5.18% Five-year fixed-rate, 5.10% Standard variable rate (SVR), 7.58% Ms Springall said this was just before 'the notorious fiscal announcement, or 'mini-budget', that saw markets panic and mortgage rates skyrocket'. She added: 'The mortgage market is undoubtedly calmer now by comparison, despite a rush to reprice fixed deals, but lenders are going to have to work incredibly hard in the coming months to balance new business and keep a close eye on their rate margins.' The average two-year fixed-rate mortgage on the market at the start of May was 5.18 per cent, while the average five-year fix was 5.10 per cent and the average SVR was 7.58 per cent, according to figures from Ms Springall said: 'Those borrowers coming off a cheap fixed rate would be wise to refinance or risk seeing their monthly repayments soar by falling onto a higher 'revert rate'. 'Despite consecutive falls to the average standard variable rate (SVR), the incentive to switch remains.' Ms Springall added: 'There is an expectation that the Bank of England base rate will be cut several times before the year is over, due to wider economic uncertainty and concerns over inflation. 'Those borrowers concerned about their homeownership aspirations will need support and innovation from lenders. 'First-time buyers are the lifeblood of the mortgage market, and they are essential to keep the market moving.' The rate cut could help to inject more buyer interest into the housing market, following the recent ending of a stamp duty holiday. The Royal Institution of Chartered Surveyors (Rics) said on Thursday that home buyer inquiries and sales fell in April. But figures released by Halifax on Thursday indicated that house prices are continuing an upwards march. It recorded a 0.3 per cent month-on-month price rise in April, following a 0.5 per cent monthly fall in March. The annual house price growth rate ticked up to 3.2 per cent in April, from 2.9 per cent in March. The average property price in April was £297,781, up from £296,899 in March, according to Halifax. Richard Donnell, executive director at Zoopla, said: 'Today's base rate cut is welcome news for people looking to sell and buy homes in 2025. 'It will provide a boost to market sentiment and filter slowly into lower mortgage rates as the cost of fixed-rate mortgages already reflects future cuts in the base rate. 'This, alongside reforms to mortgage regulations announced recently, will help boost buying power. 'This is important at a time when there is a large number of homes for sale across the UK – the average agent has 34 homes for sale. 'Improved buyer confidence will support sales and help more people realise their moving ambitions in the year ahead.' Matt Smith, a mortgage expert at Rightmove, said: 'A fresh round of mortgage rate reductions could be a boost for buyer demand as this year's spring selling season approaches its end.' Mark Manning, managing director of Northern Estate Agencies Group, said: 'Today's decision to reduce interest rates is fantastic news for the housing market and will help to strengthen buyer confidence and stimulate market activity.' Meanwhile, some savers need to get their skates on before savings rates tumble further. Ms Springall said that a year ago, the average easy access savings rate was 3.11 per cent, but by the start of May this year it had fallen to 2.79 per cent. The average easy access Isa rate at the start of May 2025 was 3.03 per cent, down from 3.33 per cent in May 2024. Ms Springall added: 'There are several challenger banks and building societies offering decent inflation-busting returns on some of the most flexible easy access accounts, but savers just need to carefully check the terms of these accounts before they invest, such as those with withdrawal restrictions.' Jenny Ross, editor of Which? Money, said: 'Unfortunately for savers, banks are now likely to cut their rate of return. 'Competitive rates are still available though – particularly away from the high street – so be proactive and shop around for a better deal. When it comes to your savings, loyalty rarely pays.'
Sky News
29-04-2025
- Business
- Sky News
'My wife lost her job and we're buying a house - do we need to tell our mortgage provider?'
Every week we ask an expert to answer your financial problems or consumer disputes in the Money blog. Today, we tackled this issue sent to us by a reader in Shropshire, who writes: We are due to complete on our first house in a couple of weeks but my wife found out last week that she's being made redundant. She works in sales and is likely to get another job soon. All our credit checks have been passed. Do we need to disclose this? The Money team answers... First, we are sorry to hear about your wife's redundancy. This kind of thing is unwelcome at any time, but if you're in the process of a house move - one of life's most stressful events - it can be particularly gut-wrenching. Do you have to tell your lender? Money regular David Hollingworth, associate director at L&C Mortgages, says: "There will be a requirement for the applicant to let the lender know that there's been a change in their financial circumstances." Most lenders will explicitly stipulate that you have to make them aware of a change of circumstances, such as redundancy. If you don't, it could have a financial impact, says Natalie Bradley, partner and conveyancing specialist at Stephensons. "The client could commit themselves to an exchange of contracts. The lender may then carry out another credit check (some do but it is rare) and ask for further payslips," she says. "They then may withdraw the mortgage offer as they become aware of the change in circumstances. If this were to happen the client would then lose the 10% deposit given on exchange." She also says if the buyer did not consent to their solicitor telling the lender about the redundancy, the solicitor may pull out of acting on their behalf. "Naturally, the client does not really want to put themselves in a position where they buy a property with no income to pay the mortgage. This could lead to repossession which would adversely affect their credit rating," Natalie says. Will mortgage be withdrawn? It's possible for the mortgage offer to be withdrawn if there's a "material change in circumstances", says Hollingworth. "For many, moving from two incomes to one is likely to make it difficult to meet the lenders' criteria and it could unfortunately mean no longer qualifying for the mortgage." Some hope A job loss doesn't automatically mean losing your mortgage offer, however. While it's worth having a rethink of whether to pursue the mortgage amount you've been offered given your new situation, you could still be okay if you are buying with someone else and your combined income is enough to cover repayments. Significant savings or a new job offer on the horizon could also reassure the lender that you won't fall behind on paying back what you owe. Or if your wife receives a redundancy payment, a smaller mortgage could be required. A mortgage reassessment A mortgage reassessment could take a while - and it may end in you being offered a smaller loan or higher interest rate. Hollingworth's advice is to give good consideration to whether to pursue the mortgage offer and therefore your house purchase at all - and don't get yourself into trouble. "Although that would potentially mean missing out on the new home in the near term it could save falling into deeper problems by taking on a bigger debt at a time when income has reduced," he says. "Failing to present the correct information to the lender through the application process would be fraudulent." This feature is not intended as financial advice - the aim is to give an overview of the things you should think about.
