News that cheaper mortgage deals are coming on to the market has been welcomed by debt management providers who believe that lower housing costs could help relive the pressure on hard up consumers.
Since the onset of the recession, mortgages have been difficult to get, and few providers have been offering mega deals, since they did not have the money to lend in the first place.
The HSBC bank has announced a new deal at only 1.99% in an effort to win market share, however this is only for consumers that are able to come up with a deposit of 40% or more. The special rate is 1.95% below the HSBC standard variable mortgage rate of 3.94%, and it lasts for 2 years.
The announcement of the deal has heralded more confidence in the housing and mortgage sectors, and it is viewed by many to be a sign that the markets are beginning to ease. There are now in excess of 1,600 different mortgage deals available to UK consumers today. This is more than at any time since the start of 2009.
The only downside is that a large deposit is still required in order to get the best deals, and this has left the lowest rates of interest out of reach for many house purchasers, particularly the first time buyer market.
According to Moneyfacts, the financial information service, as many as 27% of all new mortgage deals requires a deposit of at least 40%. The same time last year, the number of deals that required such a high deposit stood at only 7%. What a difference a year makes.
Nathan Gladwell, of IVA advice specialists The Debt People said “it’s all very interesting.”
