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New starter scheme with mortgage interest rate UNDER 1%

Jeffrey Bailey — Fri, 22 Mar 2024 15:12:42 +0000

A NEW starter scheme offers mortgages with an interest rate below 1%.

The Own New’s Rate Reducer mortgage offers buyers of new construction a reduction in mortgage interest when they purchase a home from several major home builders.

We have explained everything you need to know about the schemeCredit: Alamy

These include Barratt Homes, Barratt London, David Wilson Homes, Persimmon, Taylor Wimpey, Bellway and Berkeley Homes

The scheme, which started in February 2024, gives home buyers access to a very low mortgage interest rate during the initial term of their mortgage.

Own New Rate Reducer works by using incentive budgets that home builders offer to their customers to reduce their monthly mortgage payments over a fixed term.

For example, if the homebuilder offers a 5% incentive on a home, Own New Rate Reducer takes this amount and applies it directly to the mortgage interest to reduce monthly payments.

Depending on their lender’s criteria, buyers can choose to spread the benefit over the first two or five years.

For example, Virgin Money, one of the first lenders to join Own New’s Rate Reducer, says that for a new home worth £300,000 the introductory 2 year mortgage rate of 4.79% with a £995 fee at an LTV will be 65%. reduced to 0.99% at 60% LTV with a £495 fee.

But remember: to get this rate, you need a 40% deposit.

Halifax, Lenders Gen H, Furness Building Society and Perenna also offer discounted introductory mortgages through the scheme.

In addition to saving on monthly costs during that period, the customer also pays more on the capital value of his mortgage, because the interest charged on the loan is lower.

Lenders will still carry out their usual affordability assessment to check whether the buyer can afford repayments if interest rates rise once the fixed term benefit expires.

What is the Bank of England base rate and how does it affect me?

To access this scheme, independent financial advice must be obtained from a regulated mortgage broker who has completed additional training.

Commenting on its own new Rate Reducer product, David Hollingworth, Associate Director at L&C Mortgages, said: “Buyers will no doubt have put their plans on hold due to higher mortgage rates, which has pushed up their monthly payments.

“This product aims to address these concerns by taking advantage of the developer’s incentive to lower mortgage rates.

This will help address one of the key barriers for many and give buyers more breathing room on their monthly payments.

‘Borrowers will need to meet lenders’ affordability tests as normal, but it will also be important for them to plan ahead.

“Once the deal ends, it’s likely that rates will still be higher and payments will increase.

However, buyers will know this along the way and can therefore work to make provisions for an increase in payments in the future.”

How does the scheme work in practice?

With the Own New Rate Reduced scheme, you buy a new-build home with a mortgage and pay a lower mortgage interest than when you buy on the open market with a traditional mortgage.

When you choose your property, the developer agrees to contribute 3% or 5% of the purchase price.

The mortgage lender will then offset the 3% or 5% developer contribution against the mortgage interest to reduce your monthly payments for the first two or five years, depending on the length of your initial term.

Barratts Homes says mortgage rates below 1.89% will be available through the Own New Rate Reducer program in spring 2024, assuming a 5% incentive for housebuilders, with an initial period of two years and an LTV of 75%.

For comparison, on the open market in spring 2024 the best two-year fix at an LTV of 75% is 4.42%.

So if you take out a $180,000 mortgage over 25 years at 1.89% through the Rate Reducer program, your mortgage payments for the first two years will be $754 per month.

This is €238 per month less than if you took out the best two-year fixed rate with an interest rate of 4.42%, leaving you with an annual saving of €2,856.

Who is eligible and how do I apply?

The scheme is open to those who buy a new-build home and who:

Are a first time buyer
Are a house mover
Have owned real estate in the past

To purchase a home through the Own New scheme, visit www.ownnew.co.uk.

Here you can find an eligible property from a developer who has signed up for the scheme.

You should then discuss your mortgage options with a recognized Eigen Nieuw mortgage broker, such as our partner free mortgage broker L&C.

Once you have agreed, you will continue with the purchasing process of the new construction as normal.

What are the advantages and disadvantages of the scheme?

The main advantage of this mortgage arrangement is that it results in significantly lower monthly mortgage costs for a fixed period.

As a knock-on effect of paying lower rates, the homeowner will also pay off more of their property’s capital.

But once your introductory period ends, you should be prepared for mortgage rates to rise.

You also get a more limited choice of properties eligible for the scheme, and you may not get the nominal 0.99% rate if you can’t afford a 40% deposit.

Other starter schemes where you need a small or no down payment

Several major banks and building societies allow first-time buyers to borrow the full amount needed to purchase their home.

These deals are often called 100% loan-to-value mortgages because you don’t need a down payment to purchase.

Last year Skipton Building Society launched its Track Record 100% mortgage available to tenants buying their first ever property.

The only catch is that the amount you can borrow has a limit, because your monthly repayment cannot be more than what you currently pay in rent.

Real estate developer Fairview recently launched its Save to Buy program.

This allows starters to save for their final deposit after their move.

Buyers pay a fixed amount monthly into a Fairview piggy bank instead of rent.

You only need a 1% deposit to get started and when you’ve built up enough equity, you can apply for a mortgage to buy your home.

Thanks to the Right to Buy scheme, tenants of social housing can buy the home they rent with a discount of up to 70%.

You get a 35% discount on your social housing if you have been a tenant in the public sector for three to five years.

The right to purchase is similar to the right to purchase, but offers people who rent from a housing association or another public sector landlord the opportunity to buy their home.

It is open to anyone renting in the public sector for three years or more and offers a discount of £9,000 to £16,000 on the purchase price.

How much you get depends on the location of the home.

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The Bank of England maintains interest rates after UK inflation slows

Sabir Ansary — Thu, 21 Mar 2024 12:58:39 +0000

The Bank of England kept interest rates at their highest level in 16 years, even as inflation in Britain fell to the slowest pace in more than two years.

On Thursday, policymakers at the central bank left their policy interest rate at 5.25 percent for the fifth time in a row. The decision to hold rates was widely expected, but analysts were monitoring the votes of the nine-member rate-setting committee to see if a consensus emerged on whether price increases were under control and when rate cuts could begin.

Eight members of the committee voted to maintain rates, with the two policymakers who voted for higher rates last month abandoning their position. One member voted for a rate reduction.

The Bank of England kept interest rates on hold “because we need to be sure that inflation returns to our 2 percent target and stays there,” Andrew Bailey, the central bank governor, said in a statement. “We are not yet at the point where we can lower interest rates, but things are moving in the right direction.”

Monetary policy had to be restrictive “for an extended period,” according to the minutes of this week’s meeting. But, officials added, policies could remain restrictive even after interest rates were cut, providing the clearest signal yet that rate cuts were coming.

For much of last year, inflation in Britain has been stubbornly high. Prices rose faster than in neighboring European countries and a tight labor market pushed wages up. These concerns have recently begun to subside. Data released on Wednesday showed annual inflation fell to 3.4 percent last month, down from 4 percent in January and the lowest rate since September 2021.

Economists expect inflation to slow sharply in coming months, possibly below the central bank’s target of 2 percent, as household energy bills fall. Core inflation, which excludes food and energy prices that tend to be more volatile and influenced by international prices, fell to 4.5 percent last month, the lowest in more than a year. At the same time, the weakness of the economy has put pressure on the central bank to cut interest rates. Britain ended in recession last year.

Policymakers have warned that the impact of lower energy prices will eventually fade and inflation will return to higher levels. Rather than just hitting 2 percent, policymakers want to be sure they can get inflation back to that level over a long period of time before cutting rates.

So officials have been keeping a close eye on wage data to see if growing pay packages create longer-term inflationary pressures. Annual wage growth, excluding bonuses, rose 6.1 percent in the three months to January, the latest data showed.

The debate over the timing of the interest rate cuts is occupying policymakers at several major central banks. On Wednesday, U.S. Federal Reserve officials kept interest rates steady but said they still expected to make several rate cuts this year. The same day, European Central Bank President Christine Lagarde said euro zone policymakers would have more data, especially on wages, by June to give them confidence that inflation was under control, fueling speculation that interest rate cuts could begin in the future. summer.

Earlier on Thursday, the Swiss National Bank unexpectedly cut interest rates, the first move among central banks in advanced economies. Inflation peaked in Switzerland at around 3.5 percent, much lower than elsewhere in Europe, and has been below 2 percent for several months. The strength of the Swiss franc was also a consideration in the decision to cut rates, officials said. A strong currency can hinder the economy by making exports more expensive. After the interest rate move, the franc fell sharply against the euro and the dollar.

Officials at the Bank of England have been divided for some time over how to tackle high inflation. Swati Dhingra, who voted again for a rate cut, has argued that the weakness of the British economy means inflation would fall and that the latest rate hikes may have been excessive and needed to be reversed more forcefully.

Last month, Jonathan Haskel and Catherine L. Mann voted in favor of a rate hike, highlighting tight labor markets and the risk of entrenched inflationary pressures. But they both abandoned that position this month and joined the majority in holding rates steady.

Still, all eight members who voted to hold rates said they needed to see more evidence about the persistence of inflation before easing the bank’s policy.

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Bank of England interest rate decision confirmed: how it affects your finances

Jeffrey Bailey — Thu, 21 Mar 2024 12:15:03 +0000

MILLIONS of households will breathe a sigh of relief after the Bank of England left interest rates unchanged again today.

The decision-makers at the Bank’s Monetary Policy Committee (MPC) have now kept interest rates at 5.25% for the fifth time in a row.

The Bank of England has maintained its base interest rate for the fifth time in a row

The bank rate has risen fourteen times since it reached an all-time low of 0.1% in December 2021

Banks and lenders use the Bank of England’s (BoE) base rate to set the interest rates it offers customers on mortgages, loans and savings.

BoE Governor Andrew Bailey said: ‘In recent weeks we have seen further encouraging signs that inflation is easing.

‘We have again kept interest rates at 5.25% today because we need to be sure that inflation falls back to our target of 2% and stays there.

“We are not yet at the point where we can lower interest rates, but things are moving in the right direction.”

At the last meeting, the MPC voted by a majority of 8 to 1 to maintain the bank rate at 5.25%.

One member preferred to reduce the bank rate by 0.25 percentage points to 5%.

It comes just a day after the CPI measure of inflation fell to 3.4% last month – down from 4% in January and the lowest since September 2021.

Most economists had expected interest rates to be 3.5%.

It means inflation is now closer to the BoE’s 2% target.

Inflation is a measure of how much the prices of everyday goods such as food and clothing, and services such as train tickets and haircuts, are now compared to a year earlier.

Economists generally agree that interest rate cuts will happen later this year.

And the Bank has indicated at recent meetings that cuts are likely in the future.

It would reverse a four-year trend of raising rates or leaving them unchanged at each Bank meeting.

An interest rate cut is expected to reduce mortgage costs for millions of households.

This comes after bank interest rates rose from an all-time low of 0.1% in December 2021.

What is inflation and what does it mean for me?

It was increased to tackle rising inflation.

High interest rates are intended to dampen demand and spending, thereby reducing inflation.

Since September, the bank rate has been held at 5.25% as inflation has declined, easing the burden on mortgage holders.

We explain below what exactly a new rate pause means for your finances.

What does it mean for my mortgage?

When interest rates rise, it usually means that your mortgage costs will increase, depending on the type you have.

Those with fixed rates are usually safe until they remortgage.

However, other mortgages, such as tracker mortgages or standard variable rate (SVR) mortgages, could be immediately affected.

Homeowners with an adjustable-rate mortgage may not see their payments increase immediately, but they are likely to increase shortly after interest rates increase.

But the exact amount depends on your loan and your loan-to-value.

However, if the BoE freezes the current interest rate, your lender may choose to do nothing.

This will come as a huge relief to those who have experienced fourteen consecutive increases in their mortgage bills.

Either way, your bank should warn you of any increase in your rate before it goes up.

We’ve also explained how to find the best mortgage rate.

What is the base interest rate and what impact does it have on the economy?

NINE members of the Bank of England’s Monetary Policy Committee meet eight times a year to set the base interest rate.

Any change in the Bank’s interest rate can have far-reaching consequences as it directly affects:

The costs that lenders charge people to borrow money
The amount of savings interest that banks pay to customers.

When the Bank of England cuts interest rates, consumers tend to increase their spending.

This can directly impact the country’s GDP and help move the economy into growth and out of recession.

In this scenario, the cost of borrowing is typically cheap, and the biggest winners are first-time buyers and homeowners with a mortgage.

But those with savings tend to lose.

However, when more credit is available to consumers, demand can increase and prices tend to rise.

And if inflation rises significantly, the Bank of England could raise interest rates to drive prices down again.

When the cost of borrowing rises, consumers and businesses have less money to spend, and in theory prices should also fall as demand for goods and services falls.

The Bank of England is tasked with keeping inflation at 2%, and raising interest rates is one way to achieve this goal.

In this scenario, the losers are the ones in debt.

First-time buyers will lose out on cheaper mortgage rates, and those with variable rate tracker or standard mortgages will usually be hit immediately by base rate increases.

Those with fixed-rate contracts are generally safe if they enter into a contract when interest rates are lower, but their bills can increase dramatically when it comes time to remortgage.

The cost of borrowing through loans, credit cards and overdrafts also increases as the base interest rate rises.

However, the winners in this scenario are those who can save money.

Banks tend to enter the fray by offering market-leading savings rates when the base rate is high.

What does this mean for credit card and loan rates?

Again, if the base rate is increased, the cost of borrowing through loans, credit cards and overdrafts could increase as banks are likely to pass on the increased rate.

Certain loans that you already have, such as a personal loan or car financing, usually remain the same because you have already agreed on the rate.

But rates on future loans could be higher, and lenders could increase rates on credit cards and overdrafts – although they should let you know in advance.

But if interest rate hikes are halted, nothing will likely change.

However, you can still cancel a credit card and have 60 days to pay off the outstanding balance.

What does it mean for my savings?

Savers are the largest group that has actually benefited from the last fourteen interest rate increases at the banks.

That’s because banks tend to enter the fray by offering market-leading interest rates.

Although banks typically act much slower than passing on higher interest rates.

If the base rate does not rise, banks will probably benefit from this and also leave their interest rates unchanged.

Anyone currently getting a low rate on easy-to-access savings might find it worth shopping around for a better rate and moving their money.

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I’m Ken’s new love interest, but I’ve battled with my body for years, says Helen Lederer

Jeffrey Bailey — Thu, 21 Mar 2024 05:02:43 +0000

SHE once took ‘naughty’ slimming pills to keep her weight off – but Helen Lederer thinks she has finally learned to accept her body as it is.

The veteran comedian and actress, who joins Coronation Street as Ken Barlow’s latest love interest next one week, says: “It’s crazy what I would put up with just to lose some weight.

Helen Lederer admits she once took ‘naughty’ slimming pills to keep her weight off – but the new Corrie star thinks she’s finally learned to accept her body as it isCredit: Getty

Helen will play Ken Barlow’s new love interest in the soap

Helen admits that if, as an emerging actress, she had been offered trendy slimming shots Wegovy or Ozempic, she would have jumped at the chanceCredit: Instagram/@helenlederer

“But you just have to forget about it and move on.”

Helen, 69, who rose to fame as a comic in the early 1980s and later starred in the TV sitcom Absolutely Fabulous, admits that if, as an emerging actress, she had been given trendy slimming tricks Wegovy or Ozempic, she would have jumped at the chance to try them out. to take.

“The shots sound like a dream come true,” she says of the diabetes medication that has helped celebrities like Sharon Osbourne and Oprah Winfrey lose weight.

‘If only they had had that when I was young…’ . .

I haven’t had the figure of a model, or the type of attractive actress, so I’ve experimented with dieting all my life, limiting myself to 400 calories a day.

“And if skinny shots help people be healthy, then that’s great.

“Plus, it’s prescribed by professionals, unlike the naughty diet pills I used.”

Weight loss medications are big now newsMorgan Stanley Research expects the market for obesity drugs to rise to £60 billion by 2030.

And Helen can understand the call well.

She says, “In life you always think, ‘Oh, if only I had perfect legs.’ . . ‘You always just want the perfect body, so it makes sense why these have become popular.

“I haven’t had the figure of a model, or the type of attractive actress, so all my life I’ve experimented with dieting, including limiting myself to 400 calories a day.”

The mother-of-one, who grew up in Eltham, south-east London, added: “I was no stranger to trying anything when I needed to lose weight, it didn’t matter how I did it.

Comedian Helen Lederer wants YOU to get excited about women’s cancer

“I managed to get slim, but then I got tired of it, so I gained weight.

“It had a lot of ups and downs.

“If I had gotten the skinny shot when I was younger, who knows? Maybe it would have helped me.

“It’s great that it works for people and it’s amazing how far science has come.”

Helen, who will appear in Corrie next Wednesday and catches the eye of Ken Barlow on a stag night, says she loved starring opposite William Roache, 91, the Street’s longest serving actor.

‘It’s a burden to be different’

“Bill was such a charming, lovely man,” says Helen, who admits she “dropped everything” when she was offered the role.

But while Helen may feel better about herself these days, she has struggled with her body image for decades.

At 6ft 4in, she has yo-yoed from a size 10 to a size 16 throughout her career and admits she starved herself to stay thin.

“I’ve been in different phases of my body my whole life,” she says.

“For years I had phases where I had to switch on and off diet pills.

‘When they worked I thought they were great, but it wouldn’t take long for your heart to start racing.

“I remember there was a comedy series I was in Scotland and I don’t think I ever ate anything while I was taking it – I just drank a lot of wine.

“Now I look back and think, ‘How?’ But then people just did this and got on with it.

“It really was like living the Ab Fab life: ‘I’m the muggins that really do it’.”

Helen started her career as a stand-up comedian at London’s Comedy Store, and quickly became one of the country’s most popular TV personalities, working with acts such as French & Saunders, Rik Mayall and Harry Enfield.

I didn’t look particularly conventional and it’s a bit difficult to be different

But it wasn’t easy being a young woman in the male-dominated comedy world and Helen remembers how she had to develop a thick skin.

“It used to be that a funny woman who didn’t look normal or average was someone to avoid,” says Helen, who releases her memoir Not That I’m Bitter on April 11.

She adds: “I didn’t have the look of it, so I don’t think I was necessarily that accepted through any group because I didn’t fit into any category.

“I didn’t look particularly conventional and it’s a bit difficult to be different.

“But I guess as you get older you just have to come to terms with it.

“If I can make people laugh, I just have to try where I can.”

Devastated by insecurities about her body, Helen says she would cover up in clothes that distracted from her physique.

“I would dress functionally and not wear clothes where someone could see my bosom, or mine, you know what,” says Helen, who has a daughter named Hannah, 33, with her first husband Roger Alton, a former newspaper editor . married 1989-1991.

She says, “You don’t want people to watch it, especially if you’re trying to be funny.

“People can’t help but make comments.”

‘I was that big person… who was funny’

Despite setbacks in her career, Helen is happily married GP Chris Browne has persevered for 25 years since 1999, landing a semi-regular role at ratings giant Ab Fab as idiot magazine contributor Catriona.

“I always wanted to work in comedy and I must have been so determined that no one would stop me from doing that,” she says.

“I’m not saying it all went smoothly.

“It’s a competitive world and society was different then.

“I was the big person in the class who was funny, so I played on that, which I thought worked.

“I didn’t wear glamorous clothes and I never tried to. I understood that look was not for me.

“I wore pants instead of skirts and made sure I had things that covered my crotch.”

One thing Helen has always resisted is the urge to have cosmetic surgery.

“If people want to make adjustments, that’s fine, but personally it’s not for me,” says the star, who also appeared in the series Celebrity Big Brother in 2017.

‘I don’t agree with some people’s choices about what they do with their faces, but that’s to each their own, right?

“I stay away from judgment. It’s not up to me to do that.

“People who have had all this dental work done now look more uniform.

“We used to be a rough old mix – we were probably quite ugly.

‘It sounds terrible, just like in the war, but that’s because we didn’t have the opportunity to change ourselves. We just kept going.

“But I think all those things, like cosmetic surgery, are great – if they work.

“On the other hand, for me there are areas that I have left untouched – probably too untouched.

“I don’t know if I should try it, maybe?

“I think that might become something else to worry about.”

After four decades in showbiz, the actress, who also starred on TV in medical soap Doctors and drama series Midsomer Murders, shows no signs of slowing down.

She says: “I’m still going to continue wherever life takes me.

“I like to have a party and I certainly won’t stop that.

“My motto in life now is just keep going, and maybe gain more self-confidence.”

Helen works with the liqueur Warnincks Original Advocaat

The star appeared in The Secret Policeman’s Ball in 1989Credit: Rex

Helen as Catriona in the BBC’s Ab Fab, alongside Joanna Lumley as PatsyCredit: BBC

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Major lender cuts interest rates in anticipation of the Bank of England’s interest rate decision

Jeffrey Bailey — Wed, 20 Mar 2024 21:57:27 +0000

A major lender has cut its mortgage rates after inflation fell more than expected and ahead of a key Bank of England meeting.

NatWest has announced it will reduce mortgage deals by up to 0.24% for those who refinance, and some deals by up to 0.07% from tomorrow.

NatWest has reduced interest rates on selected mortgage productsCredit: PA

The bank will offer a five-year fixed rate remortgage deal for someone with a loan-to-value (LTV) of 90% at 5.30%, down from 5.54%.

Mortgage holders with a Loan-to-Value value of 60% can get a five-year remortgage deal at 4.48%, up from 4.59%.

The LTV is the percentage of the outstanding mortgage compared to the value of the home.

It comes after the latest inflation figures came in lower than expected, fueling expectations that the Bank of England could cut its key interest rate sooner than expected.

The CPI measure of inflation for February was 3.4% – down from 4% in January and the lowest level since September 2021.

Most economists had expected interest rates to be 3.5%.

Inflation is now moving closer to the Bank of England’s 2% target.

Inflation is a measure of how much the prices of everyday goods such as food and clothing, and services such as train tickets and haircuts, are now compared to a year earlier.

A target of 2% has been set for a steadily growing economy.

It comes ahead of tomorrow’s latest interest rate decision.

The Bank is expected to keep its base rate at 5.25% for the fifth time in a row, but the latest drop in inflation could see it fall sooner than expected.

Lenders tend to price their mortgages in anticipation of what the Bank will do in the future, rather than immediately. Hence NatWest’s decision to reduce some mortgage rates.

Rohit Kohli, director of estate agency The Mortgage Stop, said borrowers would see “some light at the end of the tunnel” after NatWest’s decision to cut rates.

What is the Bank of England base rate and how does it affect me?

Meanwhile, Ben Tadd, director at Lucra Mortgages, said other lenders could follow NatWest’s lead by cutting rates.

He added: “NatWest is the first major bank to take action on the positive inflation figures released this morning.

“We hope this could be the start of a new interest rate war in the mortgage market.”

It comes after a number of lenders cut mortgage rates in January, ahead of the BoE’s rate cuts this year.

But three major lenders, including Halifax and Santander, raised rates earlier this month after months of fluctuating swap rates, which underlie fixed-rate mortgages.

Other brokers were more cautious as NatWest also announced it would also increase rates on some two-year trackers by up to 0.4% tomorrow.

Tracker mortgages are more tied to the BoE base rate, meaning they can rise or fall at any time, unlike fixed interest rates which remain the same for the life of the deal.

Gareth Davies, director at South Coast Mortgage Services, said: “It is intriguing to observe NatWest’s decision to increase the prices of tracker products, especially when they are experiencing strong demand.”

Many homeowners looking to take out a new mortgage have opted for a tracker in anticipation of a drop in fixed mortgage rates this year.

Economists expect inflation is now likely to fall below the Bank of England’s 2% target in April or May, thanks to the upcoming 12% fall in the energy price cap on April 1.

They said this could pave the way for the Bank to start cutting rates in August or possibly as early as June.

How to get the best deal on your mortgage

Finding the best mortgage deal depends entirely on what’s available at the time, but there are ways to get ahead of the competition.

Usually, the larger the deposit, the lower the interest you can get.

If you take out a new mortgage and your loan-to-value ratio has changed, this could also give you access to better rates than before.

A change in your credit score or an increase in your salary can also help you access better rates.

If you have a fixed rate, you could see higher interest rates at the end of the current term, after the BoE increases rates from 2022 until last year.

And if you’re nearing the end of a fixed deal in the next six months, it’s worth contacting your broker now to lock in a rate.

If they drop between now and the end of your deal, you can always apply for a different rate before taking out a new mortgage.

Do I need to repair?

HERE we take you through the pros and cons of a fixed mortgage agreement.

Positives

Beat potential interest rate increases – You will not suffer if the Bank of England increases the base rate.
Your credit will only be checked once during the term – This means that if your score is lowered because you took out a credit card or store card after closing the deal, it will have no effect on your mortgage.
Protection against changes in credit criteria – If the criteria for the affordability of a mortgage are tightened, you may not be able to refinance at a competitive rate. With a certain term you have more time to meet the criteria.
Predictability – You know exactly how much your mortgage costs will be over the term, which makes it easier for you to plan.

Cons

You do not benefit if interest rates fall – You run the risk of missing out on a lower interest rate if the base interest rate falls during this period.
Early exit fees – Homeowners risk heavy fines if they have to terminate the contract prematurely. These can amount to up to 7% of the remaining balance.
You will be charged a fee for early payment – If your circumstances change and you wish to make a significant overpayment or pay off the amount early, you will be charged a fee.
You may be paying too much – Homeowners who have to pay more money generally have to pay higher rates. If you take a deal when you don’t have much left to pay, you could miss out on lower rates and, as a result, you could end up paying more than you need to.

If you leave a fixed deal early, you’ll typically be charged an exit fee, so you’ll want to avoid these additional fees.

But depending on the cost and how much you can save by switching or staying, it may be worth leaving the deal, but compare the costs first.

Use one to find the best deal Mortgage comparison tool to see what’s available.

You can also go to a mortgage broker who can do comparison shopping for you, with most offering free advice to help you secure the best deal for you.

Some brokers charge for advice, so ask them first.

It may cost a few hundred dollars, but it could save you thousands of dollars in total on your mortgage.

You will also need to consider the costs of the mortgage, although some have no costs at all, or you can add these to the cost of the mortgage.

But keep in mind that this means you will pay interest on it and it will be more expensive in the long run.

You can use a mortgage calculator to see how much you can borrow.

Please note that if you decide to take out a new mortgage with a new lender, you will need to pass affordability checks.

It can also check your credit file to see if you have repaid previous debts.

You may also need to provide documents such as utility bills, proof of benefits, your last three months’ pay slips, passports and bank statements.

It is possible to avoid new affordability checks by taking out a new mortgage with your existing lender, provided you do not want to borrow more or extend your term.

Do you have a money problem that needs to be solved? Get in touch by emailing money@the-sun.co.uk.

Moreover, you can join us Sun Money chats and tips Facebook group to share your tips and stories.

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Huge boost for Brits as inflation eases to 3.4% in February, while food and energy prices push interest rates lower

Albert Elence — Wed, 20 Mar 2024 07:09:48 +0000

By Katherine Lawton

Published: 03:02 EDT, March 20, 2024 | Updated: 03:07 EDT, March 20, 2024

British inflation eased to 3.4 percent in February, while food and energy prices pushed it down – a welcome boost for the British.

This figure has fallen from 4 percent in January and is closer to the Bank’s target of 2 percent.

The drop means the cost of living is at its lowest level since September 2021, when it was 3.1 percent.

Meanwhile, British economic growth could close to US levels, the Chancellor predicted ahead of the release of the latest inflation figures.

In a positive assessment of the economy, Jeremy Hunt said it was ‘absolutely possible’ that Britain could grow faster than Europe.

US GDP grew by 3.2 percent in the final quarter of 2023, figures show, while the British economy shrank by 0.3 percent. Economic growth in the eurozone was flat over the same period.

Jeremy Hunt speaks to Rishi Sunak after presenting the annual budget statement in the House of Commons on March 6

The U.S. economy defied fears of a recession, helped by a rate hike to curb inflation and a tight labor market that has kept wages high.

Appearing before colleagues on the Economic Affairs Committee this week, Mr Hunt spoke about efforts to boost productivity in the public and private sectors.

He said: ‘If you look at our policy to increase private sector investment with the full tax breaks that we have announced, if you look at our nurturing of the technology sector, which I think is a great opportunity for Britain will be. moving forward.

“It is absolutely possible to healthily move our economic growth closer to U.S. growth levels compared to the growth levels of continental Europe.”

This is a breaking news story. More to follow.

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The exact date when interest rates could fall if the Bank of England makes a decision this week

Jeffrey Bailey — Tue, 19 Mar 2024 09:09:45 +0000

MILLIONS of households may soon be able to catch their breath again as interest rates are forecast to remain at their current levels.

Decision-makers at the Bank’s Monetary Policy Committee (MPC) are expected to keep the base rate at 5.25% for the fifth time in a row on Thursday, March 21.

Experts assume that an interest rate cut will probably take place in the summerCredit: Getty

The MPC will assess whether economic conditions are suitable to reduce, maintain or increase interest rates.

The Bank has indicated at recent meetings that cuts are likely in the future, although rates are expected to remain unchanged this week.

It comes as the base rate has risen from an all-time low of 0.1% since December 2021.

Experts now assume that an interest rate cut will likely take place in the summer, between June and August.

The Bank of England meets during the summer on May 9, June 20 and August 1.

Sarah Coles, personal finance expert at Hargreaves Lansdown, said: “At the end of last year, markets were reasonably confident that we would get a rate cut from the Bank of England in May or June, but persistent inflation at the start of the year forced them to think again.”

“At this stage, May looks highly unlikely, June is in the balance and the market is increasingly expecting a rate cut in August.”

Savings rates

How to reduce energy costs and get help with FOUR major household bills

What it means for savings

Savers have benefited from recent increases in the base rate, and would likely be negatively affected if it were to fall.

However, banks tend to compete for your money by offering market-leading interest rates, so make sure you do your research.

Sarah explains: “For savings, the good news is that you don’t need to know exactly what’s in the card to make the right decision, because your emergency fund should be in a competitive, easy-to-access account, so everything you need what you need to do is find the best rate available today.”

Putting money aside for any reason is always a good thing.

However, it’s good to have a plan you’re saving for as this will help you choose the best savings account for you and ensure you get the most out of your hard-earned money.

There are different ways to put money in a savings account.

The most popular are easy access accounts, which usually pay a variable interest rate that can change at any time, but you can access your money at any time, without any penalty.

The best savings rates are usually found on fixed-rate bonds. These pay a fixed interest rate over a specific period, such as one, two or five years, and you get your money and interest back once the product term expires.

What it means for your mortgage

Anyone who already has a fixed interest rate will not see their payments fall if the Bank of England cuts rates, as they are fixed for a fixed period.

So those looking to take out a mortgage must decide whether to get one now or wait until interest rates drop in the summer.

But other mortgages, such as a tracker or standard variable rate (SVR) mortgage, can also be directly affected.

SVRs are generally higher than fixed rates for this reason.

Sarah says: “For remortgagers, you are faced with the question of whether you should choose a fixed rate or switch to a tracker rate.

“Fixed rates are still quite expensive, but they do offer certainty about your expenses.”

“Tracker prices may be a bit higher today, but if prices fall from August onwards, you will see that decline.”

If you want to borrow around this time, that is also good news for you.

Alice Haine, personal finance analyst at Bestinvest, said: “Rate cuts would be a huge relief for many borrowers, especially those struggling with heavy debt or oversized mortgages.”

“A rate cut in the summer, perhaps as early as June, would provide a huge boost to potential buyers and existing homebuyers desperate for some relief from skyrocketing financing costs.”

What it means for credit cards

Certain loans you already have, such as a personal loan or car financing, usually remain the same because you have already agreed on the rate.

So you’re not likely to see any difference, but rates on future loans may be lower, and lenders may reduce rates on credit cards and overdrafts.

This doesn’t mean you should take out unnecessary loans or credit cards, as rates could rise again in the future.

Do you have a money problem that needs to be solved? Get in touch by emailing money-sm@news.co.uk.

You can also become a member of our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.

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Japan is raising interest rates for the first time in seventeen years

Sabir Ansary — Tue, 19 Mar 2024 04:36:10 +0000

Japan’s central bank on Tuesday raised interest rates for the first time since 2007, taking them above zero and closing a chapter in its aggressive bid to stimulate an economy that has long struggled to grow.

In 2016, the Bank of Japan took the unorthodox step of cutting borrowing costs below zero, an effort to revive borrowing and lending and stimulate the country’s stagnant economy. Negative interest rates – which central banks in some European economies have also adopted – mean savers pay to leave their money in a bank, giving them an incentive to spend it instead.

But Japan’s economy has recently begun to show signs of stronger growth: After years of low inflation, inflation has accelerated, boosted by larger-than-usual wage increases. Both are indications that the economy may be on a path to more sustainable growth, allowing the central bank to tighten its interest rate policy, years after other major central banks quickly raised rates in response to a jump in inflation.

Even after Tuesday’s rate hike, Japan’s interest rates are far behind those of the world’s other major developed economies. The Bank of Japan’s policy rate was raised to a series zero to 0.1 percent of minus 0.1 percent.

The bank said in a statement on Tuesday that it had concluded that the economy was in a “virtuous cycle” between wages and prices, meaning wages rose enough to cover rising prices, but not so much that they would limit corporate profits. Japan’s headline inflation rate was 2.2 percent in January, according to the latest available data.

The central bank also scrapped a policy of buying Japanese government bonds to control how high market interest rates can rise, encouraging companies and households to borrow cheaply. The bank had slowly eased policy over the past year, resulting in higher debt yields as the country’s growth prospects improved.

The bank said negative interest rates and other steps it had taken to stimulate the economy “have fulfilled their role.”

In many countries, a rise in inflation has troubled consumers and policymakers, but in Japan, which has often suffered from growth-sapping deflation, the recent price rise was welcomed by most economists. The Japanese stock market, buoyed by the bullish economy and corporate reforms that favor shareholders, has attracted large sums of money from investors around the world, causing the Nikkei 225 index to recently break a record high since 1989. The Nikkei rose slightly on Tuesday after the Bank of Japan’s announcement.

The move away from negative interest rates, which should help shore up the country’s weak currency, is seen by investors as another key step in Japan’s turnaround.

“It is another milestone in the normalization of monetary policy in Japan,” said Arnout van Rijn, portfolio manager at Robeco, who set up and led the Dutch fund manager’s Asia office for more than a decade. “As a long-term Japan follower, this is very important.”

Bets on a rate hike intensified this month after the Japanese Trade Union Confederation, the country’s largest association of trade unions, said its seven million members would get pay increases averaging more than 5 percent this year, the biggest annual negotiated increase since 1991. contributed to an average wage increase of approximately 3.6 percent in 2023.

Before the results of the wage negotiations were announced, investors had expected the Bank of Japan to wait longer before raising interest rates.

Accelerating wage growth is a crucial sign to policymakers that the economy is strong enough to generate some inflation and is able to withstand higher interest rates. Like other major central banks, the Bank of Japan targets annual inflation of 2 percent; the rate is already almost at or above that level two years.

The increase in wages indicates that companies and employees expect higher prices to continue, Van Rijn said. “People no longer believe that prices will fall, so that trickles down to wage demands.”

The Bank of Japan concluded in its statement that “it is very likely that wages will continue to rise steadily this year, following strong wage growth last year.”

Shizuka Nakamura, 32, a resident of Yokohama, a port city south of Tokyo, said she had seen prices rise. “I feel the rising cost of living,” said Ms. Nakamura, who has an administrative job at a construction company. She recently had a child.

“My friends who are around my age and have had children all say things like diapers and baby food are getting more expensive,” she said.

The Bank of Japan’s interest rate move was also significant because it was the last major central bank to abandon its negative interest rate policy. They and central banks in Denmark, Sweden, Switzerland and the eurozone have broken monetary policy taboos by pushing interest rates below zero – essentially meaning savers pay banks to hold their money and creditors get less back than lend them out – in an attempt to spur economic growth after the 2008 financial crisis. (Sweden ended negative rates in 2019, and the other European central banks followed in 2022.)

Negative central bank policy rates have rocked global bond markets, with more than $18 trillion of debt trading at negative yields at its peak in 2020. Now that inflation and economic growth have returned and central banks are cutting policy rates, have increased – usually much more aggressively than Japanese – virtually none – debt now has a negative yield.

Rising interest rates in Japan make investing in the country relatively more rewarding for investors, but the Federal Reserve’s target interest rate is still about five percentage points higher and the European Central Bank’s four points higher. While foreign investors have started to funnel cash into the country, yields abroad are still attractive for Japanese investors, even as the Fed and ECB are expected to cut interest rates, prompting a rapid repatriation of cash to Japan is hindered.

Central bankers in Japan have also suggested a slow shift in policy, wary that raising rates too quickly could undermine growth before it takes hold.

Kiuko Notoya reporting contributed.

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RBA locks in interest rates: what it means for mortgage holders

Albert Elence — Tue, 19 Mar 2024 04:08:39 +0000

By Stephen Johnson, economics reporter for Daily Mail Australia

Published: 11:30 PM EDT, March 18, 2024 | Updated: 00:04 EDT, March 19, 2024

The Reserve Bank has issued a chilling warning to any Australian home borrower expecting some relief in the coming months.

The cash rate was left unchanged at a 12-year high of 4.35 percent on Tuesday afternoon, but Governor Michele Bullock warned that more rate hikes were possible. This was another blow to those hoping for an early interest rate cut.

“The path of interest rates that will best ensure inflation returns to target within a reasonable time frame remains uncertain and the administration is not making any pronouncements on anything in or out,” she said.

“Returning inflation to target within a reasonable time frame remains the administration’s top priority.”

The Reserve Bank has issued a chilling warning to every Australian home borrower (pictured from an auction in Sydney)

Major banks and economists had expected rate cuts in 2024 as inflation eased.

But Ms Bullock said inflation was still too high even as interest rates were held for the third RBA meeting in a row.

“While recent data suggest inflation is slowing, it remains high,” she said.

‘The board expects that it will take some time before inflation is sustainably within the target range.’

Monthly inflation data showed the consumer price index was 3.4 per cent in January, only marginally above the RBA’s target of 2 to 3 per cent.

But according to the more comprehensive quarterly CPI data, annual headline inflation was 4.1 percent in December.

The Reserve Bank does not expect inflation to fall within the target range of 2 to 3 percent until December 2025.

Ms Bullock warned that inflation could remain high unless workplace productivity improves to justify faster wage growth.

Hourly productivity levels in Australia contracted by 0.4 percent last year – a far cry from the long-term average of above 2 percent.

“Nevertheless, this level of wage growth will only remain consistent with the inflation target if productivity growth increases to around the long-term average,” she said.

The cash rate was left unchanged at a 12-year high of 4.35 percent on Tuesday, but Governor Michele Bullock warned that more rate hikes were possible. This was a blow to those who hoped for an early interest rate cut.

The RBA’s thirteen rate hikes in eighteen months, between May 2022 and November 2023, marked the most aggressive pace of monetary policy tightening since 1989.

A borrower with an average mortgage of $615,178 is now paying $16,728 more per year in repayments, compared to May 2022, when the RBA cash rate was still at a record low 0.1 per cent.

The rate hikes have slowed the economy, with gross domestic product growing just 0.2 percent in the December quarter.

Australia’s annual growth rate of 1.5 percent in 2023 was almost half of the 2022 level of 2.7 percent.

“While there are encouraging signs that inflation is moderating, the economic outlook remains uncertain,” Bullock said.

“December national accounts data confirmed that growth has slowed.”

Ms Bullock warned that inflation could remain high unless workplace productivity improved to justify faster wage growth (pictured is a Sydney waitress)

Australia has not been in a recession since the 2020 Covid lockdowns, but has been in a per capita recession since the March quarter last year, where output per worker has shrunk.

The RBA now meets eight times a year instead of on the first Tuesday of every month except January.

Ms Bullock will hold a media conference at 3.30pm Sydney time, following a two-day board meeting on monetary policy.

The Reserve Bank’s next board meeting is on May 6 and 7.

Consumer price indexInflation

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On-loan champion star Isaak Davies is attracting transfer interest in Europe

Jeffrey Bailey — Mon, 18 Mar 2024 13:00:42 +0000

ISAAK DAVIES is attracting interest from across Europe, with clubs in France, Germany and Belgium all keen to sign him.

The 22-year-old forward from Wales is on loan to Belgian side Kortrijk from Cardiff for a season and has scored eight goals in twenty games in the Jupiler Pro League.

Davies is in excellent form for KortrijkCredit: Rex

Davies’ impressive performances on the continent have alerted Euro hopefuls, with Monaco, Freiburg and Genk all leading the hunt for his signature.

Davies is under contract with the Bluebirds until the summer of 2025, but his emergence means the forward is likely to make a move this summer.

Kortrijk are second in the table but Davies’ winner at second-placed Anderlecht on Saturday inflicted their first home defeat of the season.

Davies was a youth team product of Cardiff and was previously the subject of a £2.5 million bid from Burnley.

While the highly rated Davies, who joined the Championship club at the age of seven, had also attracted the attention of Brentford and Southampton.

Uncapped Davies was left out of Wales’ Robert Page squad for Thursday’s Euro 2024 play-off semi-final against Finland in Cardiff.

But the versatile forward has represented Wales at all levels between U17 and U21 and if he continues his form in Europe, Page will have to take that into account.

Cardiff could do with Davies’ goals and assists at the moment as they sit 11th in the Championship.

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They are currently eight points away from a play-off spot, with the season at risk of coming to naught.

Adding to the misery is the fact that they lost the South Wales derby 2-0 to Swansea City this weekend.

Young stars will shine at the 2024 European Championship

In more positive news, Aaron Ramsey returned for the Blue Birds this weekend after coming off the bench.

His fitness will be key for Wales if they want to qualify for the European Championship.

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