The best bet for people considering a mortgage is either a tracker-based product or a one that comes with a fixed rate, suggests an industry expert.
There has been an unusual rise in the number of mortgage deals that have flooded the market in recent times.
Ray Boulger, senior technical manager at John Charcol, has been perplexed by the sudden rise in available mortgage deals. He claimed that there was "no logical reason" behind the sudden spurt of new schemes.
He pointed out that those seeking to file a mortgage application would be best served if they looked at a product that tracked the base bank rate or one which offered a fixed rate for a longer time. In comparison, he added, customers who chose to pick up a short term mortgage deal were bound to lose out in the long run.
He explained: "My view at the moment is trackers represent the best value because I think interest rates will stay low for some time, but if you want a fixed-rate then I think it makes sense to go for five-years."
Recently published data, by the Council of Mortgage Lenders, recorded that 45,000 new mortgage schemes were approved in the month of March this year. This reflected an increase of 25 per cent in comparison to the month before. The current year's figures had jumped by 45 per cent in comparison to the number of mortgages transacted in March 2009.
March also saw the number of loans sanctioned to first-time buyers increase by 27 per cent to 17,300 in comparison to the month before. The total sum of the money borrowed amounted to about £2 billion, which was 42 per cent higher than March 2009. Most of these borrowings were done against deposits lower than 25 per cent, with first-time buyers borrowing up to 76 per cent of the price of the property.  |
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