Borrowers Urged to ‘Shop Around’ For Mortgage Deals

The uncertain economic conditions facing the UK are leading mortgage brokers to recommend that borrowers “shop around” for the best deals, according to the BBC. Since the beginning of the week, a significant number of lenders have increased their costs for first-time buyers, some by up to 0.3 per cent, while others have altered their pricing bands based on loan-to-value (LTV), which means that borrowers with access to a large deposit may not get as cheap a deal as they previously thought. Following this, some brokers have claimed that the increased number of mortgage products being launched at the start of the year are set to be superseded by an “ebb and flow” effect over the next six months, as lenders grow concerned about the mounting cost of lending due in turn to the ongoing crisis in the eurozone. This means that a shift in prices could become something of an avalanche, as lenders tend to move as a group, to prevent themselves being swamped by mortgage applications if they stand out too much. Nevertheless, broker Aaron Strutt, who works for Trinity Financial, told the BBC that “it really does pay to shop around at the moment if you are looking for a mortgage as some lenders are much more expensive than others.” Coreco broker Andrew Montlake added: “We are going to see a period in which the Bank rate remains stable, so lenders will manage the business they want by increasing or decreasing their rates.” Mr Montlake went on to note that lenders have experienced an increase in long-term costs, due to the eurozone crisis. He said that he believed this uncertainly in the mortgage markets would remain for at least the first six months of 2012, until the crisis began to resolve itself.