Average mortgage rate hits record low

Posted by Richard Catlin in Mortgages on 19 June 2015 - Richard is Marketing Director at checkmyfile.

The average new mortgage in the UK is now at the lowest level since records began.

The Bank of England (BoE) reports that the average rate for a 2-year fixed rate mortgage (at 75% LTV) is now 1.9%, having fell consistently over recent months. This is the lowest they have been since the BoE began keeping records in 1995.

Borrowers with a bigger deposit can get even better rates, with HSBC offering a 2-year fix (at 60% LTV) at just 0.99%. Yes, it probably only scrapes underneath the 1% rate to grab headlines, but it still represents a stunningly low rate.

With the BoE expected to raise base rate at some point in the first half of 2016 – analysts can’t agree whether it is likely to happen in the first or second quarter of the year – borrowers are looking to lock in rates before deals start to get more expensive again.

With average asking prices also on the up, borrowers will need to be sure that they look beyond the headline rates and make sure that funding for that dream home will pass not just the stringent affordability checks that a lender will conduct, but that their credit report doesn’t contain any nasty surprises that could scupper – or at the very least delay – an application.

In many cases, a delay due to having to challenge information contained on your report, could easily be enough for a sale to collapse. If a seller has a couple of interested parties and your credit rating delays you getting an offer in principle, then it doesn’t take a rocket scientist to work out who they are going to choose.

So, if you’re thinking of applying for a mortgage any time soon, don’t leave the credit check element to chance.

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