Five-year fixed mortgages are making a comeback
The last few days have seen a number of five-year fixed-rate mortgage offers hit the market with suggestions that many mortgage providers believe interest rates are nearing their bottom. Abbey is offering a five-year fixed mortgage at 3.95% with a £995 fee and a 40% deposit required. We have also seen a similar deal announced by HSBC with a fixed rate of 3.99%, so are times really changing?
While it is good news that the five year fixed mortgage is back in the running it is concerning to see a substantial deposit required at this moment in time. While from the bank's point of view they are looking for as much asset backing as possible, which is provided by a 40% deposit, many UK property investors are not in a position to accommodate such a requirement. We are very much at a "chicken and egg" situation in what comes first, a reduction in rates and terms by mortgage providers or property investors stepping up to the mark and finding their 40% deposits?
Slowly but surely we are seeing signs of interest in the mortgage market but until deposit requirements fall further there is very little chance of a significant increase in mortgage lending in the short to medium term.
Share this..
Related stories
Are We Entering The New Ethical Investment Age?
While so called ethical investing is not new to the UK financial markets it seems that many teenagers, who are potential investors of the future, are asking their parents to consider ethical investing for both their children’s future investments and their own. It seems that the young of today have very much grabbed the ethical trend of recent years and look likely to take it to t...
Read MoreWill Goldman Sachs call the UK government's bluff?
It has been revealed in the financial press today that US giant Goldman Sachs is seriously considering moving vast areas of its UK operation overseas. With Geneva seen as the potential beneficiary of the company's ongoing battle with the UK government, in light of the 50% windfall tax on banking bonuses, this will test the resolve of the UK government to push ahead with his highly controversial an...
Read MoreScottish government calls for Flyglobespan probe
After receiving significant criticism in the financial press for effectively ignoring the issue of Flyglobespan, and the company's collapse this week, the Scottish government has announced an investigation into the fall of business. While there is no evidence of mismanagement or potential legal issues, the authorities are keen to learn from the collapse of what was Scotland's largest airline busin...
Read MoreBank of England to announce UK rate decision this morning
The Bank of England is today set to announce this month's decision on UK base rates with analysts certain that rates will remain at 0.5%. Despite the fact that we have seen signs of life in the UK economy over the last few weeks there is a concern that potential unforeseen financial situations in the short term could derail the recovery. As a consequence, with liquidity in the banking sector still...
Read MoreBritish Gas doubles boiler scrappage scheme offer
Despite the fact that the UK government has introduced a boiler scrappage scheme which will see up to £400 off the cost of a new boiler system, British Gas has gone one better by matching the UK government's offer. So in effect, British Gas customers could be in for a £800 reduction on the cost of a new boiler simply by scrapping their old and potentially inefficient boiler for a more up-to-date...
Read More