Mortgage Rates: Why Now Could be the Perfect Time to Invest

Mortgage rates at all time low

Mortgage borrowing rates in the UK are now lower than ever before. In fact, they are so low they are edging towards zero. Responding to the COVID-19 crisis, the Bank of England (BoE) made two rate cuts in quick succession, first to 0.25 per cent just before the Budget, and now to 0.1 per cent. But what does this mean for buyers using a mortgage?

The average mortgage rate has dropped to the lowest level in history, which experts believe has been responsible for a surge in mortgage activity as the lockdown restrictions have been eased in the last few weeks.

Finance experts at Moneyfacts say the average two-year fixed rate is now at a record low of just 2.09 per cent, making it the perfect time to put spare savings into investment property. It also represents a good time for first time buyers who are in a positive financial situation to make use of these extraordinarlity low rates.

What product should I choose?

When purchasing a property it can be hard to know how long to fix your mortgage terms for. Some will fix for two years in the hope of remortgaging to a better product in 24 months. However, the current cheapest deal in history is a five year fixed deal from TSB, offering 1.34% on a 60 per cent loan-to-value; an investors safe haven. With this in mind, buyers might be tempted to lengthen their fixed mortgage terms, and with good reason.

Moneyfacts also found that in some areas, the mortgage market is starting to show green shoots of recovery as lenders tentatively begin reintroducing deals.

Williams said: ‘We are now beginning to see lenders relaunching products within their ranges, and some providers have eased the loan-to-value caps they put in place early in the crisis.

‘Mortgage lenders are still open for business and, for those eligible, rates are low.’

‘People can lock into a low rate now,’ she added, though lenders may not keep rates so cheap as activity in the housing market begins to increase again.

Make hay whilst the sun shines

At CityRise, we believe that now is a totally unique time to invest in property as borrowing may never be this low again in your lifetime. Furthermore, with such low rates of interest, investors returns will be noticeably higher.

So our advice to all readers, and as the old adage goes: make hay whilst the sun shines.

03 Dec

November Property Market 2024
The housing market has picked up pace in 2024, fuelled by stronger income growth and lower mortgage rates, which have enhanced affordability for both...
Learn more
09 Jul

What the Labour Win Could Mean for the Property Market
From first-time buyer support to removing ‘no-fault eviction,’ the new Labour government’s key policies affecting housing and the property...
Learn more
23 Apr

Inflation Falls to Lowest Levels Since September 2021
Inflation fell in February and looks likely to fall further during 2024. It is now at its lowest point since September 2021. This increases the...
Learn more
02 Apr

New £5000 Deposit Scheme Set to Help First-Time Buyers
What is the New £5000 Deposit Scheme? A new £5000 deposit scheme allows first-time buyers to borrow up to 99% of a property’s value....
Learn more