Your financial crisis can help you in paying the less interest rate. In the past six months, the loan rate has tumbled down for the borrowers who have suffered from the financial crisis at some point in their life. For an average of two years, the fixed rate for a mortgagee who has failed to repay debt or got a County Court Judgements (CCJ) is 4.36 percent. According to Moneyfacts, in October it was 4.49 percent which means it got down by 0.13 percent. Loan of £150,000 for over 25 years, one has to pay now £822/ month. There’s a bigger drop in rates for an average of three years. Falling from 4.51 percent to 4.21 percent, monthly repayments got shot down to only £809/ month.
But, there’s a rise in rates for an average of five years duration. It got up from 4.76 percent to 4.92 percent which makes the borrower to pay £870/ month.
Also, borrowers with good credit score and also with no bad credit past are availed far fewer rates compared to the rates for bad credit scorers. Currently, people with good credit scores get the two years interest rate at just 2.48 percent which is very less.
How to avail this low rate mortgages?
Only the lenders who are specialist can avail low rate mortgage. Firstly, you have to go to the brokers to reach such specialist lenders. Weighing up the inquiries done by customers on online portal in 2018 and 2019, it is found that from the borrowers the inquiries got up by 50 percent. Online loan advisors stated that this jump in inquiry percentage is observed in the first three months of 2019.
In March, Virgin Money which is a popular financial service provider brand in countries like United Kingdom, Australia and South Africa, is all set to review the requests of the borrowers.
What are the benefits with the low rate of mortgages?
Low rate of mortgage will create an opportunity for both the lenders and the borrowers. People willing to make big purchases will reach out to take a loan. Also, lower the mortgage rate the more a borrower can spend. Which ultimately lead to more spending by the people. Higher interest rates stop consumers from spending and force them to keep on saving for the instalments. The higher interest rates won’t be limited to the consumers only. When consumers stop to consume, the direct effect will go on the market. As a result, there will be a huge decrease in productivity.
The economy of a country is directly affected by interest rates. Markets like stocks, bonds and also economic changes like inflation or deflation go through a big change with increase or decrease in interest rates. But it also takes a full financial year for the change to be noticed. Also, good knowledge of interest rates with respect to economy will help the government to take better financial decisions.