Wednesday 27 October 2021
Now is a great time to invest in property with mortgage rates recently reaching a historic low following the launch of a new 0.79% loan, the lowest ever recorded in Britain.
A rate war erupted in the mortgage market in recent months with banks repeatedly undercutting each other on price. At one point, there were 140 loans on the market with less than 1% interest rates according to Moneyfacts.
Platform, part of the Co-operative Bank, undercut them all, having launched a two-year fixed-rate loan at 0.79%.
Borrowers must have had a 40% deposit and paid a £1,499 arrangement fee to take out the Platform loan however, even with the significant arrangement fee, borrowers could still have had a substantial saving from moving to a lower rate.
Platform also launched a two-year fixed-rate loan at 1.97% for customers with a 10% deposit, targeting first-time buyers. In total it was reported by Moneyfacts that there were 4,877 mortgages on the market in September 2021 compared to 2,412 last September.
Sharon Cain, Director and Financial Consultant, at Marvel Finance commented, “the property market is booming, especially for investment properties. With interest rates at an all-time low, investors can experience lower payments and bigger returns.”
Nationwide also launched the UK’s first ever sub-1 per cent buy-to-let mortgage, meaning landlords as well as retail borrowers could benefit from some of the lowest interest rates ever recorded.
The two-year fixed rate for a 65% LTV (loan-to-value) mortgage with Nationwide was 0.99 per cent, but it does incur a 2% fee of the loan amount.
The building society also made rate cuts up to 0.45 per cent across its five-year-fixed BTL mortgages.
Nationwide was also the first-ever lender to offer a sub-1 per cent rate on a five-year fixed rate mortgage.