Our rate guarantee explained. Over the last 3 years, I keep writing these updates as we face unprecedented times, with the expectation that I won’t have to use those words again for a long while, but yet, it just keeps coming.
The outbreak of COVID-19, or at the very least the reaction to it, has not been anything I have ever experienced. No-one saw it coming. So it is no surprise that markets have reacted so badly, as the extent to which this will have an economic impact simply is not known at this time.
What is our rate guarantee
What we can offer in this period though is a ‘Rate Guarantee.’ Meaning, as and when rates are reduced we will proactively tell you. So if you have an ongoing application, we will let you know if your lender has reduced their rates so you can benefit by switching with them, or indeed with another provider. How practical that will be will have to be acted upon on a case by case basis. However, you can have 100% confidence that we will tell you and act accordingly. Lenders, and indeed many other brokers simply will not inform you, but we feel it is our duty to do so and offer our rate guarantee. As we have many exclusive products and are well positioned to move quickly through this period. We can genuinely say that you will get the best outcome from us through this very challenging time.
What is the market outlook?
As stated above, it is very unclear yet as to what long term impact there will be in any market. However, specific to the mortgage/property market, it is hard to see this being damaging for the long term. If this virus does indeed pass in the next few months as predicted, it won’t change the market situation we saw coming into this period. That being very low interest rates (now lower!), banks keen to lend (now with even more money to lend as rules have been relaxed to ensure they do), and a shortage of property (which will only increase prices in the long term). So it does present an opportunity to nail down a great mortgage rate if refinancing, or even a great deal when moving. I don’t mean to appear callous or cold, but that is just the reality of the situation.
As explained in our rate update last week, we are yet to see fixed rates drop yet on any scale but we are expecting that to start filtering through shortly. Especially with the US cutting rates again overnight.
With so much happening, we do urge you to follow our LinkedIn Page, as we will keep relevant updates coming to try and smooth out this period as best we can for our clients, and prospective clients.
There have not been any publications of SWAP rates since the Bank of England cut its benchmark rate down to 0.25% on Wednesday. However, Libor has dropped further to 0.427% from 0.517% the week before.
As you would expect, we are starting to see Banks pull their Tracker products and reintroduce new ones with larger margins as no-one predicted the 0.5% cut last week. So that could present an opportunity for the brave among you to hedge if rates go down further?! It would however be very useful to read our update from last week on the technicalities of that, which you can do here
These rates are relevant as most Banks buy in money based on the above markets. Libor often funds Variable rates and SWAP rates often fund Fixed Rates. Lenders will then add a margin to the above to reflect their risk and profit objectives.
2 Year Variable from 0.89%
2 Year Fixed Rates from 1.14%
5 Year Fixed Rates from 1.39%
BTL Rates from 0.99%
The actual rate you will be offered will be dependent on your personal circumstance and deposit level. Please speak to one of our advisers so that they can guide you through this process
Source: Twenty7Tec March 2020
Our business is built from referrals. If you know anyone that can benefit from our service, please do refer them onto your adviser, or contact us directly. You can see why we are one of the UK’s most highly rates mortgage brokers on our Google Page.
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