Mortgages - a time of price rises and price cuts
This summer has seen the launch of the latest initiative to kick start lending in the mortgage market and wider economy.
The worries caused by the Eurozone crisis and the weakness of the economic recovery has lead to lenders facing increased costs in funding mortgages and other lending.
A lender can either borrow money from other lenders (the wholesale market) or they can borrow money from you and me as a savers (the retail market). This money is then lent out to people who want a mortgage or other loan.
Savers may have recently noticed that savings rates have increased, so this source of funding now costs lenders more to tap into. The cost of borrowing in the wholesale market has also increased.
The government through the Bank of England is offering to provide mortgage lenders extra funds at much reduced costs, so long as this money is then lent out again.
Over the summer, we have started to see the effects of this filter through into more mortgage products being available and lower interest rates being charged on new mortgages.
The extra cost to mortgage lenders of funding their mortgage lending has also lead to price increases. Only this week, we have seen Santander inform their customers who are currently on the Standard Variable Rate that the rate will increase by 0.5% from 4.24% to 4.74%.
For those people who reached the end of their fixed or tracker rate mortgage and who are now on the lenders Standard Variable rate, now could be the ideal time to review their mortgage to help save a few pounds.
Oak Tree Mortgages take an honest approach in helping you to decide whether changing your mortgage is a good move or not. For some people who want to move, re-committing to a new mortgage may not be the right thing to do. Some standard variable rate mortgages may also offer good value for money, so changing mortgage may not be right for everyone.
If you feel that you may be paying too much or you simply want to see what other options might be available, give as a call so we can help.
Call us today on 0121 733 8833
Your home may be repossessed if you do not keep up repayments on your mortgage
Oak Tree Mortgages are authorised and regulated by the Financial Services Authority