Independent Financial Life Planners Bishop's Stortford: Mortgage rates come and go…

Monday, 19 September 2016

Mortgage rates come and go…

Enable’s experienced IFA’s in Bishops Stortford and Saffron Walden know that mortgage interest rates can go up as well as down. At the moment the average variable and fixed mortgage products rates have fallen to record lows. According to the latest Moneyfacts UK Mortgage Trends report, the Bank of England’s move to drop the base rate to 0.25 per cent in August meant two-year tracker’s fell by 0.19 per cent from 2.13 per cent in July to the lowest point on record of 1.94 per cent. The fixed rates have also hit record lows, with two-year products dropping 0.4 per cent to 2.44 per cent and five-year fixes falling 0.03 per cent to another record of 3.05 per cent.

But according to Bovill’s mortgage specialist interest-only mortgages could be less of a “ticking time bomb” and more a “firecracker”. Five years ago Martin Wheatley described interest-only mortgages as a ticking time bomb” and Darcy Tallon, a mortgage specialist at regulatory consultancy Bovill thinks the fuse still hasn’t been lit on the former Financial Conduct Authority chief executive’s warning, and only time will tell if Wheatly was right. Tallon says “The market has moved on, maybe due to his proclamation, but that time bomb is looking more like a firecracker at the moment.”

Citizens Advice research last year estimated that nearly 1 million people had interest only mortgages with no arrangements to pay them off at the end of the term. Mr Tallon says the “real test” will come after 2020 when a surge of interest-only mortgages mature. But perhaps these people still won’t struggle to pay off their outstanding balance, said Mr Tallon assuming house price growth and low LTVs.

Your home may be repossessed if you do not keep up repayments on your mortgage.

http://www.ftadviser.com/2016/09/16/mortgages/interest-only-mortgage-firecracker-rather-than-time-bomb-L2VQ73I3F1h2GanhIqMZsK/article.html

Issued by: Enable Independent Financial Life Planners •  25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

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IFA Bishop's Stortford

At Enable Independent we know that our clients trust us and rely on our advice to help them to plan a better, more secure financial future. This is a responsibility that we take very seriously especially because we know that many clients have chosen us on the recommendation of friends and family. Each one of our advisers has deep expertise in their area of specialist knowledge and, as a team, we hold some of the highest qualifications available in the financial advice industry.

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