More choice over deals than 10 to 15 years ago
Try and look on the bright side despite gloom
Published:
Now that we are into May and it feels like summer is here, I think it is time to try and be a bit less gloomy about mortgages.
Yes, rates have gone up. Yes, lenders are being stricter in vetting the applications they receive and yes, the highest loan-to-value available is lower than it has been for some time. But, putting this into perspective, rates are still historically quite low.
Throughout most of the 1980s and early 1990s, mortgage rates were in double figures with the base rate hitting 15% in 1989.
Compared to that, current rates of about 6% are pretty reasonable. Twenty years ago, lots of lenders did not have any products above 75% loan-to-value (LTV) and 100% loans are only a comparatively recent introduction.
Although 100% loans have disappeared for now, they are not extinct and will no doubt make a comeback in due course.
At the moment, many lenders do not charge a mortgage indemnity premium whereas until about 10 years ago virtually any borrowing above 75% LTV included the additional cost of a mortgage indemnity policy. Despite the number of deals now available being significantly lower than it was six months ago, there is almost certainly more choice now than there was 10 or 15 years ago.
For those unfortunate enough to have some adverse credit, I fully appreciate it is much more difficult to get a mortgage now than it was a few months ago and the cost is much greater.
But at least there are still deals available. Some 15 or more years ago, there were virtually no lenders offering mortgages to borrowers with adverse credit.
There is still quite a wide choice of mortgages around, some requiring only a small deposit and many with rates which are still pretty reasonable. Some of the lower rates available include:
Tim Twiddy is managing director of Atlantic Investors. For more information, call 0800 163 659.
