Mortgage rates squeeze expands to lower LTV mortgages
The rising cost of mortgages that has been squeezing many first time buyers out of participating in the property market is expanding to include lower LTV mortgages.
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Mortgage rates across the largest high street lenders at all LTVs are now rising as banks struggle with a surge in new business sparked by homebuyers seeking to finalise deals ahead of the end of the stamp duty holiday.
Hina Bhudia, Partner at Knight Frank Finance, says:
“If you’ve secured a rate with a lender, lock it in as soon as you can because there’s no guarantee it’s going to be there tomorrow,”
“Across the board at the high street lenders there is an upwards march in the cost of mortgages and among the big players it’s at every LTV. What was a significant problem for first time buyers will now start affecting buyers at every level of the property ladder.
“There is a reluctance from the major banks to lend at the levels they have been lending at, both due to the mixed economic outlook and the sheer scale of new business coming through the doors as home seekers understandably try to complete purchases ahead of the end of the stamp duty holiday.
“To keep the flow of business at manageable levels, the biggest lenders are resorting to increasing rates to ensure they aren’t the cheapest on the high street. The moment another lender becomes the cheapest and the phones start ringing off the hook, that lender will follow suit and you begin to have this snowball effect.”
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