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Tuesday, February 12, 2013

Trend Shows Lower Fixed Rates

Andy Young at Property Hawk Mortgages comments on the Q4 2012 Investor Profile’s findings:

“What is notable about the last quarter is the trend for lower fixed rates, with the average buy-to-let fixed rate mortgage offer processed by Property Hawk Mortgages at 4.67%, down from 4.88% in the previous quarter. This suggests that the Government’s fiscal measures, including the Funding for Lending Scheme, are enabling lenders to offer lower interest rates to borrowers, and may also reflect falling swap rates during Q4 2012."

“Interestingly, Property Hawk Mortgages saw a rise in the average variable rate for mortgage offers during the last half of 2012, with fixed rates and variable rates now converging to become closer than they have been for at least two years.

“This could imply that lender’s are increasing their margins on variable rate products, but it is also possible that the higher LTV (and therefore higher priced) products now available in the buy-to-let mortgage market are impacting on rates charged. With fixed rates becoming more competitive, they are likely to be a popular option for landlords, and during Q4 2012, 47% of Property Hawk Mortgages’ mortgage offers were for fixed rates compared with 53% for variable rates. This is a noticeable shift from the previous quarter when just 41% were for fixed rate mortgages and 59% were for variable rates.”

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