Interest rates have now hit a record low of 0.25% but what does that mean for borrowers? Banks are so keen to attract new customers that they are fighting amongst themselves to win business, with the upshot of more attractive deals and better mortgage availability.While for savers the new even lower interest rate is eye-wateringly painful, those borrowing money have something to cheer about. There۪s a window of opportunity for property buyers and those remortgaging to secure a deal that gives them financial security or reduces their monthly mortgage repayment. But before you rush off to see how much you could shave off your borrowing bill or afford to repay if interest rates plummet, there are still restrictions and criteria to meet. At Daniel Cobb, we work closely with mortgage lenders and financial advisors to gain an insight into the mortgage industry, and we encourage property buyers, investors and those remortgaging to consider:-Stress tests still apply - as a result of the Mortgage Market Review, a lender will still need to see all a borrower۪s outgoings, with evidence that they can repay all their bills now and in the future, should interest rates rise and their financial situation change.The best rates aren۪t for all - the headlines might sizzles with rates of 0.99%, 2% and so on but you۪ll need to read the small print. Many of the lowest mortgage rates will be reserved for those with the biggest deposit or amount of equity. Rates also depend on the type of mortgage - tracker, fixed etc.Buy-to-let lenders already looking to 2020 - calculating the viability of a buy-to-let loan is a different business to an owner-occupier mortgage application. There۪s a real tightening ahead of changes to how buy-to-let interest is offset against tax returns. By 2020 the tax offset perk will have disappeared and lenders are already factoring this into their equations and therefore looking for bigger yield margins.
Homeowners are set to snap up the cheapest ever ten-year home loans as the mortgage price war continues to escalate.
http://www.dailymail.co.uk/news/article-3677954/Race-offer-cheapest-10-year-mortgage-Watershed-moment-2-39-deal-launched.html
