It would be fair to say that the end of 2017 was an interesting time for mortgage holders and lenders. Okay, the thought of paying more money each month in mortgage payments may be more difficult or annoying than interesting for most homeowners, but given that this was the first rise in interest rates in a decade, a lot of people had to react to the Bank of England increasing the base rate, and a lot of focus was placed on mortgage ranges.
In figures provided by Nationwide, the average mortgage holder had to pay an additional £22 per month after the movement from 0.25% to 0.5% in November of 2017. With further increases likely, many mortgage holders are considering witching their mortgage to see if they can obtain a more attractive rate. The uncertainty over the future of interest rates also means that mortgage lenders have had to adapt, which has resulted in new mortgage ranges.
New mortgage ranges on offer in 2018
The changes at the end of 2017 meant that several lenders have altered, upgraded or introduced new mortgage ranges for the start of 2018. If you are looking to switch, this is the ideal time to do so. There are suggestions that the base rate could reach 1% by the end of the year, so you may need to act quickly to ensure you have an appealing rate before changes occur.
While the new ranges from existing lenders will be of interest, there is also a new name in the UK mortgage market. This is a very familiar name that you will likely know, but Marks & Spencer is entering the mortgage market through their M&S Bank arm. While the company has provided many credit solutions to their audience, their mortgage offerings represent new ground for the company.
M&S is entering the mortgage market
The M&S brand is well known and highly respected in the UK. This means that many people will take an interest in what is on offer. It is also likely that some people will naturally gravitate towards these offerings because they associate M&S with quality and assurance. These are good attributes to have when looking for finance deals and as a mortgage is likely to be the biggest finance solution a person takes out in their life, people need assurance and confidence in their finance solution.
M&S Bank will offer fixed rate and tracker mortgages, but they also look set to provide solutions that have the first-time buyer in mind. The two to five year fixed rate mortgages will have 90% loan to value (LTV) status. There is also going to be a cashback offer on some of the mortgages.
There has already been praise lavished on the offerings of M&S Bank. One financial data service, Moneycomms, has suggested that M&S Bank is providing the cheapest mortgage for many first-time buyers. There is also the fact that M&S Bank has partnered with Shelter, and has promised to provide £25 as a donation for every mortgage that has been agreed. Many consumers like to work with firms that have a conscience, and this small action could go a long way to convincing people to check out what M&S Bank is offering.
At Williams of Petersfield, we know that the mortgage process is challenging and perhaps even draining for many consumers. We are always happy to offer guidance and if you would like help on what your next step should be when buying property, please get in touch.