Mortgages  

Broker predicts Help to Buy rate war in 2014

The managing director of London-based mortgage broker Springtide Capital said prospective buyers should bide their time as more competitive rates for the government’s mortgage guarantee scheme would not arrive until January 2014.

Mr Knight said: “It is my view that the best rates on the market won’t be around until the scheme has been around for a few months, with more lenders signed up. The post-new year period is traditionally a busy time, which is why we are expecting to see rates down to between 4 per cent and 4.5 per cent in January 2014 as competition for Help to Buy borrowers really heats up.”

Since Help to Buy was launched earlier this month only banks within the Royal Bank of Scotland group and Halifax have disclosed their rates under the scheme. The majority of high street lenders are expected to declare their hand in January.

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However Clydesdale and Yorkshire Banks have announced a rate cuts for borrowers with a 5 per cent deposit outside of the Help to Buy initiative.

Fiona Sharp, senior adviser for Norfolk-based Almary Green, suggested that buyers with a five per cent deposit might be better off applying for a mortgage outside of Help to Buy as rates could be cheaper.

Ray Boulger, senior technical manager for mortgage broker John Charcoal, said: “If property prices continue to go up, you may find yourself paying more for a property if you wait until January. It is better to start looking now and if you find a house at the right price, do not wait for a better deal.”

RBS/NatWestHalifax Yorkshire/Clydesdale
Two-year fixTwo-year fixThree-year fix
4.99 per cent5.19 per cent4.99 per cent
No fee£995 feeNo fee
Help to BuyHelp to BuyNon-Help to Buy

Source: Financial Adviser