The drastic drop in the average interest rates of the offset mortgages has made them extremely competitive. Usually more expensive than the standard mortgages, the offset options are now almost equal to the traditional property loans in the total cost.
A comparison between 2019 and 2020 can explain the situation accurately.
- Mortgage products fell to 110 from 200 in 2019, and now it is 95.
- Fixed rate fall on the mortgage
- Two years fixed rate mortgage – 2.10% (April 2019) and 1.90% (April 2020)
- Five years fixed rate mortgage – 2.35% (April 2019) to 1.96% (April 2020)
You can understand the difference and realise the massive wave of change that the mortgage market is facing. First Brexit and now the corona chaos, the time seems to be difficult for the UK economy that impact is sure to show on the property market.
For lenders, it may be a stressful time, but for the borrowers, it is the best duration to exploit the available opportunities. The saving rates were low already, which made the borrowers worry about the total cost of the offset mortgages. However, now, as their prices have dropped, it is a win-win situation for the fund seekers. The approval chances better and thus the big purchase too.
The struggle of mortgage providers
The lenders are eager to show to the mortgage seekers that they have a good variety of options. Due to fierce competition in the market, they cannot afford to miss even a single borrower. Those that are associated with the brokers want to make sure that their broking company shows them in the latest list of the available lenders. The borrowers can notice this in the latest notifications of an online mortgage broker that keeps them updated on the current options. It has become a prevalent culture of brokers in the UK.