Lenders honouring mortgage rates for up to 12 months is “exactly what the market needs” according to brokers, following the uncertainty around interest rates which ensued after the last budget.
While some lenders have previously pulled rates secured by brokers due to them becoming ‘sub-economic’, lenders such as Skipton are extending offer rates for both purchase and remortgage deals for up to 12 months.
Halifax and NatWest have also extended offers on new builds for up to 12 months.
These products allow brokers to lock in an interest rate which will then be valid for up to a year for their clients.
Average two and five-year interest rates still sit above 6 per cent according to Moneyfacts, though rates have been tracking down since the Bank of England’s base rate rise last week.
“12-month mortgage offers, as provided by the likes of the Skipton, are exactly what the market needs at a time of such extreme economic uncertainty,” said Mint Financial Services director, Matthew Jackson.
“This provides all-important certainty when certainty is in short supply. It also enables us, as brokers, to then monitor the market and adapt the advice if need be before completion.
“I love it when lenders show some creativity not just to help clients but to support the broker community as well. Chapeau to Skipton.”
A mortgage offer period of 12 months can also help those borrowers buying new builds who might otherwise lose out on their offers due to building delays.
Often, new builds are sold six months in advance and can regularly experience delays along the build schedule, leading to many mortgage offers expiring, director at Dimora Mortgages, Jamie Lennox, explained.
“Skipton has offered flexible solutions for a long time now and they have been a great help to borrowers. A 12-month offer provides borrowers with much needed reassurance.”
Owner of brokerage Sett Mortgages, Elliott Benson, said it can be “really distressing” for borrowers having the completion date moved “time and again”.
He added: “Having the security of a 12-month offer from a lender is a real bonus that will provide borrowers with extra peace of mind.
“One of the great unknowns when people, especially first-time buyers, are buying a new build property is whether completion will take place on time.”
Before the recent market volatility triggered by the "mini" Budget, “many lenders” offered extended mortgage completion dates for new builds, according to Rob Peters, a principal at Simple Fast Mortgages.
“Many of those deals disappeared overnight because of the risk the lender could be losing money in the future,” Peters explained.
“Kudos to Skipton and Halifax for keeping these in place and continuing to provide products that are perfectly suited for the new build market.”