The Inside Edge
So far, the first month of the New Year has seen many property experts predicting a sustained and consistent rise in mortgage rates with the general feeling being that they had reached the lowest point that they could possibly attain. Those reports have been tempered today by suggestions that rates will increase shortly but this will precede a period of rise and fall as the year progresses.
Once again, uncertainty over the economy has been blamed by those who have hinted at the forthcoming rate changes while concerns over the Eurozone crisis are believed to have led to a recent spate of increases from various lenders.
Over the course of the last few days, several major lenders have increased their rates in line with expectations and they are expected to be followed by many more home loan providers in the coming days. This news is very much in line with predictions at the start of 2012 but until now, there hadn’t been suggestions of a period of ‘ebb and flow’.
Andrew Montlake of mortgage brokers Coreco suggests that with the bank rate holding firm, lenders are set to adjust their rates upwards and downwards until they get the level of business that they are looking for,
“We are going to see a period in which the Bank rate remains stable, so lenders will manage the business they want by increasing or decreasing their rates,” Mr Montlake confirmed.
In fact, there have even been some rate reductions by some lenders for first time buyers and these go some way to confirming the likelihood of these new predictions. Mr Mortlake went on to claim that this volatility in the market will continue for the first half of the year at least and is set to continue until more is known with regards to the Eurozone crisis.
A likely outcome in the short term is a huge disparity in available mortgages as some lenders increase their rates while others start to apply reductions. The advice in this instance is quite simply to shop around.
“It really does pay to shop around at the moment if you are looking for a mortgage as some lenders are much more expensive than others,” confirmed Aaron Strutt, of Trinity Financial.
As predictions turn into confirmed rate changes, the mortgage picture may look confusing to some but if you are prepared to look hard enough for reductions, these developments could be good news for many.