Musings of a London Property Search Agent

The latest interest rate cut announced today by the Bank of England (BoE) means great news for homeowners with BoE variable rate tracker mortgages.  Variable rate mortgages based on the Bank of England base rate have been cut drastically in the last 3 months as the Bank of England base rate tumbled from 5% in September 2008 to just 2% from today. 

Mortgage lenders generally take a few months to pass on the rate but as from the early part of next year, many borrowers should see significant savings in their mortgage payments.  The table below provides an idea of the savings on a typical 25 year term BoE base rate tracker mortgage on a capital and interest basis, excluding fees and where the lender passes on the full 3% base rate cut to the borrower.  Not everyone will benefit however, as many mortgages have a collar below which base rate cuts are not passed on.

Clearly the most significant savings are for those on large variable rate mortgages which is great news for our Clients as like many London Property Finders and Relocation Agents working in the mid to top end, a significant proportion of our clients will be saving upwards of £500 a month.

All figures supplied by Piero Mazzoni of The Porchester Group Limited.  You can contact him for mortgage advice on 020 7529 1980 or email him Piero.Mazzoni@porchestergroup.co.uk

http://www.porchestergroup.co.uk/site/home/

This summary is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking action on the basis of the contents of this summary. The summary represents our understanding of the law and Bank of England base rates as at 4th December 2008, which are subject to change on a monthly basis. All mortgages are subject to status and to suitable security.  If you are ready to buy contact the London Property Search Agent

Technorati Tags: Bank of England Base Rate, Bank of England Interest Rate Cuts, Interest Rate Cuts, London Property Search Agent, Mortgage Interest, Reduction in Mortgage Repayments

Tags: Bank of England Base Rate, Bank of England Interest Rate Cuts, Interest Rate Cuts, London Property Search Agent, Mortgage Interest, Reduction in Mortgage Repayments

Musings of a London Property Finder

The news that some homeowners will be able to defer interest payments on their mortgages if they lose their jobs or suffer a temporary loss of income should be music to the ears of the masses, as it won’t just help those affected by redundancy but the repossessions this measure prevents will help to decelerate falls in house prices. 

Payments can now be deferred on home loans up to £400,000 if a member of the household loses their job or even if they suffer a loss of income for example if they lose a bonus, commission or overtime payments. 

The scheme only covers interest payments but the first step for troubled homeowners is already to convert to an interest only mortgage and most lenders will allow borrowers to do this.  The proportion of the interest to be paid and the exact terms will be negotiated between the borrower and the lender.

48,000 homes are predicted to have entered the market this year as a result of repossession and the figure is set to rise to 75,000 next year according to The Council of Mortgage Lenders.  Clearly those with loans and other debts secured on their homes could still be repossessed and those struggling to pay morgages on second homes or buy-to-lets will not be bailed out by this plan.  But the measures should stem the flow of properties to market. 

Those with property to sell will often contact Property Finders and Relocation Agents like ourselves to offer their homes to our Clients directly so we have been aware of the middle income families who suddenly find themselves struggling.  On the face of it, this is a very good move on the government’s part.  For those sitting on mortgages of £400,000 and bonus stock worth very little, negotiating with your lender is the best move.  If you are a buyer give this London Property Finder a call.

Technorati Tags: Income Support For Mortgage Interest, London Property Finder, Mortgage Guarantee Plan, Mortgage Interest

Tags: Income Support For Mortgage Interest, London Property Finder, Mortgage Guarantee Plan, Mortgage Interest