Good news for home buyers comes from the HSBC which is cutting both interest rates and fees on some of their fixed rate mortgage products.
The popular 2 year fixed rate mortgages offered by HSBC are to have their rates reduced by 0.31 percent, with an additional GBP200 taken off the admin fee. This takes it down to just GBP599. Some of the longer term fixed rate mortgages will also be reduced, with cuts of 0.16 percent.
As well as existing deals the HSBC mortgage department also has a new product to offer. A 5 year fixed rate mortgage with an interest rate of 5.98 percent is to be made available to any customers who have an HSBC Premier or Plus account. This new mortgage does have an arrangement fee of GBP999 with it.
The Halifax House Price Index for April showed a large fall of 1.3 percent, a significant fall in the period of just one month.
Predicting the state of the housing market for the rest of the year the Halifax anticipate an overall fall that will be less than 10 percent, though there will be large differences in this depending on where in the country they are. They expect prices to actually go up in Scotland for example, though houses in the West Midlands and Wales are forecast to see heavier than average price falls.
A Halifax spokesman suggested that the falling prices should be seen against their recent history of strong price rises for several years. In this context house prices can still be seen to be very strong compared with the long term trends.
A review of the current mortgage market by Legal and General shows that the fixed rate mortgage is still very popular with consumers despite the recent rate rises they have experienced.
Legal and General have looked at the differences in mortgage choices between Quarter 1 and Quarter 2 of this year, seeing where the key trends are. Fixed rate mortgages fared very well, going up from 35 percent of the market in Q1 to 58 percent in Q2. This was achieved even though interest rates went up, on average, to 6.51 percent from 5.87 percent on the popular 2 year fixed rate mortgage.
The market for mortgages is going to remain very keen on fixed rate products it seems due to the expectation of increased mortgage costs in the future. House buyers want a level of security say Legal and General, something that a fixed rate mortgage provides as the repayment amount will not be affected by base rate changes.