However, Springall warned that the overall positive trajectory “could be thrown off course” by “renewed escalation in geopolitical tensions”. Only a matter of days ago, it was reported that US President Donald Trump had called off the ceasefire in Iran – an action that could generate more uncertainty and further alter economic forecasts.
Outlook for first-time buyers
It’s not just existing borrowers keeping a close eye on mortgage rates; those looking to get onto the property ladder might be pleased to learn that average two- and five-year fixed rates charged by deals requiring a 5% or 10% deposit fell across the board between June and July. Furthermore, Springall highlighted that “product choice at 90% [loan-to-value] has surpassed 900 for the first time since the start of March”.
Nevertheless, she said there is still room for improvement, “particularly for borrowers who can only amass a 5% deposit”. The number of deals that can finance up to 95% LTV dropped month-on-month and represent just 8% of the core market.
“It is vital that lenders continue to create innovative products and relax criteria carefully to support first-time buyers, as they remain the lifeblood of the mortgage market,” said Springall. “Buyer confidence may well remain subdued until the supply of affordable housing improves this year, but for now, mortgage costs are not expected to rapidly escalate,” she continued.
“Seeking advice in the first instance to understand costs and to navigate the mortgage maze is vital, as headline-grabbing low-rate deals might not always be the best choice,” Springall concluded.
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