City watchdog sends out weekly survey to lenders to monitor interest rates and verify fair dealing in the foreclosure storm
- The weekly surveys are designed for the regulator to monitor the market.
- The data will not be published and will only be used for regulatory purposes.
- Since September 23, mini-Budget mortgage rates have increased rapidly
- However, some lenders are now cutting them slightly.
The city’s regulator, the Financial Conduct Authority (FCA), sends out weekly surveys to mortgage lenders to gather information on rates and availability amid fears of a mortgage crisis.
As regulator of mortgage lenders and servicers together with the Prudential Regulation Authority (PRA), the FCA liaises with lenders on a day-to-day basis to monitor the market.
The survey asks if the lender has made interest rate changes or withdrawn any products.
Check: The city’s regulator, the FCA, is collecting information on mortgage rates from lenders every week, even asking when products have been withdrawn from the market.
In the weeks after the then-chancellor’s ill-fated mini-budget on September 23, mortgage rates rose significantly, with the two-year average fixed rate across all LTVs peaking at 6.65 percent on October 20, according to Moneyfacts.
The last time the average two-year fixed-rate mortgage was 6.5 percent or higher was in August 2008 at 6.94 percent.
Since then, it has declined, with some lenders including Natwest and HSBC announcing rate cuts. As of October 28, the two-year average fix had dropped to 6.48 percent.
However, the Bank of England is expected to raise its base rate by 0.75 percent when its Monetary Policy Committee meets on November 3, in a bid to curb inflation, and this may send rates back to rise as lenders pass on the hike.
The FCA survey has been established to provide the regulator with oversight into issues affecting businesses and consumers. It is not known how long the surveys will be collected.
As interest rates have risen, the regulator has been working with lenders to ensure consumers get a fair deal amid cost-of-living pressures.
Mortgage rates have risen rapidly in the wake of Kwasi Kwarteng’s ill-fated budget
Apart from the increase in mortgage rates, borrowers have also been affected by a reduction in the choice of mortgage loans available to them.
Unsure how to price products after the September 23 mini-budget, some lenders pulled loans from the market, with low deposit rates aimed at first-time buyers taking a particularly hard hit.
Within a week of the tax cut budget, the number of products on the market had fallen 43 percent to 2,258 loans, the lowest number since May 2010. Since then, the number has risen to 3,063 according to Moneyfacts data. .
Research by Citizens Advice found that one in four mortgage holders will be unable to make their monthly payments if they increase £100, the figure rising to almost half of all borrowers if they increase £250.
The charity also found that one in seven mortgage holders had already cut essentials to make ends meet.
There are fears of a mortgage crisis, as fixed-rate borrowers must re-mortgage at much higher prices when their deal runs out.
What to do if you need a mortgage
Borrowers who need to find a mortgage because their current fixed-rate agreement is coming to an end, or because they have agreed to purchase a home, have been urged to act but not panic..
Banks and building societies continue to lend and mortgages are still being offered and applications accepted.
However, rates are changing rapidly and there is no guarantee that the deals will last and not be replaced by mortgages that charge higher rates.
This is the best Money Mortgage Rate Calculator powered by L&C that can show you offers that match the value of your mortgage and property
What if I need to re-mortgage?
Borrowers should shop around and talk to a mortgage broker and be prepared to act to secure a rate.
Anyone with a fixed-rate agreement ending within the next six to nine months should consider how much it would cost to remortgage now and consider closing a new agreement.
Most mortgage deals allow fees to be added to the loan and are then only charged when you withdraw. By doing this, borrowers can lock in a rate without paying expensive setup fees.
What if I am buying a house?
Those with agreed home purchases should also aim to lock in rates as soon as possible, so they know exactly what their monthly payments will be.
Homebuyers should be careful not to overstretch themselves and be prepared for the possibility of house prices falling from their current high levels, due to higher mortgage rates limiting people’s borrowing capacity.
How to Compare Mortgage Costs
The best way to compare mortgage costs and find the deal that’s right for you is to talk to a good broker.
You can use our best mortgage rate calculator to display offers that match your home value, mortgage size, term, and fixed rate needs.
Keep in mind, however, that rates can change quickly, so the advice is if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you. .
> Consult the best fixed-rate mortgages that you could apply for