Assuming that all else fits (such as affordability and the nature of the property itself, for example), the rates depend upon the percentage (LTV: loan to value) that you wish to borrow. As a very rough guide, at the moment you might expect to pay the following during the initial special rate period, whether fixed or variable:
At 90% LTV: around 5%
At 85% LTV: around 4%
At 80% LTV: around 3.25%
75% LTV or below: mainly around 2.5% to 3%, with one or two down to about 2.2%.
Without wishing to give too many figures at this point, as an example for each £100,000 borrowed at (say) 3% you would have to pay:
(a) interest only over any term: £250 per month
(b) repayment over 20 years: a fraction under £555 per month
(c) repayment over 25 years: a fraction over £474 per month
Very roughly, if the interest rate were 4%, you would add a bit more than £80 per month to the interest-only figure quoted above, and about £50 to each of the repayment figures quoted.
Market conditions and base rate changes would, of course, alter the situation, so what I say today may have altered considerably in a few months time. And these figures by no means tell you the full story, though, because these products may lack the options and flexibility of very slightly more expensive mortgages.
In particular, they tell you nothing of what will happen at the end of the special rate period - a loan with an initial very low rate will probably be a poor choice if, at the end of maybe 12 or 24 months it goes onto a high variable rate (at which time you are confronted with staying with it, or remortgaging with the the associated significant costs and inconvenience). The fees, too, need to be taken into account
In the selection of a suitable mortgage, certainly don't simply opt for the cheapest and try to save a few pounds each month. Rather, whilst looking for a competitive product, of course, make sure that the loan conditions and features suit you and that you go with a lender with a decent reputation for efficiency and consistency; this is where a good broker can provide invaluable advice tailored to your own situation and needs.
| 01.08.11 @ 01:25