Why are interest rates increasing?

With 95% lending non-existent and 90% lending only being offered on fire 24-48 hour sales, 85% loan to value is currently the new high LTV lending.

The law of supply and demand, lend the lowest interest rate on the market – receive more applications. The problem is service suffers and the lender isn’t able to cope due to the amount of business generated.

Answer – increase interest rates to slow down the volume. As each lender approaches the top of the best buy table, this is what is happening, forcing interest rates,
specifically at the higher loan to value end, upwards.

At the lower loan to value end of the market (sub 75%) rates are still competitive albeit not as competitive as pre-lockdown.

For advice please contact us.