Abbey National is bringing a 10 year fixed rate mortgage to the market this week aimed at bringing peace of mind to buyers concerned about changing interest rates.
Recent studies have shown that longer period fixed rate mortgages are more popular with consumers, the 5 year versus 3 year fixed rate options proving this point very well. The move by Abbey National to bring in a 10 year fixed rate option is hoped to win more buyers over to the idea, especially as the interest rate is just 6.24 percent. There is an initial fee of GBP999 but this still represents excellent value whilst providing the security that homebuyers crave.
This longer period has impressed industry commentators too since it is expected that Abbey National mortgage customers taking out this option will not be left to face dramatically higher interest rates when the term ends, which is what is happening right now as the plethora of 2 year fixed rate mortgages come to an end.
The latest data from the Halifax shows a 2.4 percent drop in house prices for May 2008, making them 3.8 percent lower than they were in May 2007.
A house builder commenting on the state of the housing market right now felt it was quite depressed, with sales numbers well down compared to what was expected. They are forecasting sales down by around 15 percent compared with last year and when combined with lower prices as well the state of the new house market is precarious. The Halifax figures have been confirming this situation for the last few months so it has not come as a surprise to anyone.
What is making the property market harder to work in is the limited availability of home loan funds. The Halifax mortgage providers, as well as those of other financial organisations, are being more wary of who they lend money to. Larger deposits are required now as well as a whiter than white credit history, making it much more difficult for buyers to source the funding they need.
One of the biggest mortgage providers in the UK, the Halifax, has announced more interest rate reductions on several of its home loan products.
The average mortgage rate reduction made by the Halifax is 0.25 percent, with most of its main tracker and fixed rate products enjoying this cut. Potential customers should be aware that they need to put down a deposit of at least 25 percent in order to receive this lower rate.
A Halifax spokesman explained that they were passing on recent reductions in the cost of borrowing that the banks charge each other, feeling it is in the interest of the market to offer the very best possible rate whenever possible.
