Cheap mortgages to continue, says Natwest
Fri 20 Jan 2017
Cheap mortgage deals for house buyers are unlikely to end soon, according to a new report from NatWest Bank.
Fears that rates are likely to rise follows the withdrawal of a number of high profile mortgage products in recent weeks.
NatWest says that while rising inflation has caused an increase in the longer-term rates used by lenders, it is unlikely to hit domestic home-buyers in the short term.
The report says that “while data from the Bank of England do show that the average quoted rate for some fixed-terms crept up in December [to 2017%] they are still significantly lower than they were just 12 months ago [at 2.68%].
“Most existing borrowers will therefore still be able to remortgage at a lower rate. Indeed, those coming off two year fixes in the next few months are likely to find deals a whole per cent lower than their existing rate” says the bank.
However, the bank reminds us that the Prudential Regulation Authority’s new rules require buy-to-let borrowers to pass “stress tests” for the interest rate theoretically rising to 5.5%, and that many BTL applications are likely to be rejected on this basis.