Did you know that interest rates are still at some of the lowest levels on
So, what does that mean for you?
Many of us will have read about Mark Carney and Interest rates in his speech on the 17th July, but
what does it really mean for potential house buyers?
The below chart shows how mortgage rates have fallen over the past 20 years and since hitting rock
bottom in 2009 lenders have competed for market share. Many have been offering a range of attractive
2 and 5 year fixed rate products and in the last 5 years alone, rates have nearly halved.
Example based on today's rates:
So if you were buying a brand new Linden Home today, based on a £250,000 mortgage, over 25 years
a 15% deposit, high street lenders such as Nationwide are offering rates of 2.34% with monthly
repayments of £1101. In 2010, the same mortgage would have come with a 4.39% rate and monthly
repayments of £1,374. This would have cost the average home owner £273 per month more than
even with talk of rates rising, experts predict that it will take some time before we see rates
reaching 2010 levels.
How would a rate rise effect these monthly payments?
Taking the above example:
- A 0.25% rise to 2.59% would increase your monthly payments to £1132 (£31 extra per
- A 0.50% rise to 2.84% would increase your monthly payments to £1164 (£63 extra per
So now really is the perfect time to buy, with the extension of the popular Help to Buy scheme
available until 2020 and many lenders still offering a range of competitive 2 and 5 year fixed rate
mortgages, and for homebuyers looking for longer term security and peace of mind, 10 year fixed rate
When buying a new Linden home, we recommend that all our customers talk to New Homes Mortgage
Helpline, specialists in the new homes mortgage market. With literally thousands of mortgage
products on the market, you may need help and guidance to find the most affordable and suitable
mortgage for your new home.
The Helpline Advisers are available 7 days a week.
Get in touch today, call the team on 01206
9am to 8pm Monday - Thursday
9am to 7pm Friday
10am to 7pm Saturday - Sunday
The example is based on a mortgage amount
of £250,000 and using a 15% deposit. This typical example has a £999 product fee based on
the mortgage over 25 years. 2.34% is the lender's current fixed rate for 2 years, reverting to the
lenders variable rate for the remainder of the term, currently 3.99%. The overall cost for
comparison is 3.9% APR. Illustrative interest rates are based upon market data as at 31/7/15. Early
repayment charges may apply if the mortgage is repaid within a specified period after the completion
date. There may be a charge by the lender if you cancel your application after it has been
submitted. Fees payable for arranging a mortgage may vary between mortgage products and provider.
The actual rate and terms may vary and will depend on your individual circumstances and are subject
to availability. Written illustration and full details available on request. Linden Homes does not
offer mortgage advice.