The Mortgage Finance Blog

With the house prices on the up and interest rates for higher loan to values falling, there could not be a better time for first time buyers to make the step onto the housing ladder. With bank base rate at an all time low, it is unlikely that we’ll see mortgages being offered with such low rates again.

In the early part of the summer, there was very little good news for first time buyers with limited deposits, interest rates for mortgages of up to 90% LTV were exceeding 7% effectively pricing new purchasers out of the market. Towards the latter part of summer and throughout autumn we have seen a continued downward trend on the rates charged to borrowers, culminating with 90% borrowing currently available from 4.29%.

As we bid farewell to 2009, we will also say goodbye to the current stamp duty holiday announced in September 2008. The exemption raised the initial stamp duty threshold from £125,000 to £175,000, from the 1st January 2010, the threshold will revert to its original level of £125,000, meaning that the 1% tax will, again, be levied on all property transactions above £125,000.

Although economists are divided on how quickly we will come out of recession, most of the experts seem to agree that by the end of 2010 interest rates are unlikely to have risen significantly. With a discrepancy of over 1% between tracker and fixed rates, short term trackers are likely to provide the best value to customers for at least the early part of 2010.