The new 2-yr fixed interest rate represents a cut of 0.45% off its previous 3.39% deal. In mortgage terms, that’s a substantial reduction or should I say ‘saving’, for borrowers.
Contractors will save both over the entire mortgage term and on their monthly repayments. But they’ll have to be quick. This exclusive-to-broker offer won’t last forever.
For a 10% deposit, 2.94% is one of the best first-time buyer mortgage rates on the market. Here are the details and formalities of the deal ‘at-a-glance’:
It’s worth repeating that these exclusive rates are only available through select brokers. We’re delighted to announce that we’ll be one of them offering this best buy mortgage deal.
Halifax Intermediaries head of sales Ian Wilson has this to say:
“The changes made to these products demonstrate our ongoing dedication to helping customers save money by taking out a mortgage with Halifax. We will continue to develop our product base to offer excellent value to our customers.”
Halifax set the precedent over a decade ago. Today, they continue to lead the market in affordable mortgages for first-time buyers.
It’s hard to put into words just how awesome this news is. For contractors who want to buy their first home but have only 10% down payment, it’s a game changer.
Influential city analysts have put the slew of rate cuts down to falls in swap rates. Swap rates, just so you know, are the rates banks use to charge their mortgage loans. As these rates have fallen, lenders have a little more leeway in the rates they charge.
It’s a good thing, too. Many mortgage lenders want (and need) to attract new customers to meet end-of-year targets.
The introduction of the Mortgage Market Review saw a tentative start to the year. This meant stricter lending guidelines imposed on the mortgage market.
As a result, some mortgage lenders could miss their annual targets. To make sure they don’t, lenders are rolling up their sleeves to make up for lost business.
Halifax will accept contractors’ applications from their first contract. This includes company owners looking for first time buyer contractor mortgages.
Using daily rates sets Halifax apart from other lenders, many of whom use accounts. For an established contractor, their accounts might get them by. But contract-based underwriting isn’t the same underwriting process used for a standard mortgage.
The Halifax assesses contractors’ affordability based on their gross contract earnings. That’s net contract rate income before expenses and tax, not take-home pay or accounts!
This method is a huge relief to contractors utilising a limited company. Most keep their take home drawings (salary & dividends) low to reduce tax liability. It’s a legitimate tax-planning strategy, but one that fails contractors looking for a mortgage.
One thing Halifax does insist upon is having a good credit rating. Most high-earning contractors have great credit, making obtaining a mortgage easy for them. But it’s worth noting that those newer to the lifestyle may need to check their credit score. And that will be the same almost everywhere they go.
So, yes. The Halifax has done it again. The bank’s change in strategy was a landmark for independent professionals a decade ago. This reverse in trend in interest rates for first time buyers is just as iconic, albeit temporary.
Don’t miss out on this limited-time offer while the going’s this good. The sooner you make your move, the sooner you’ll be saving on your mortgage loan.
John Yerou is the owner and founder of Freelancer Financials; a trading style & trade mark of the award winning Mortgage Quest Ltd. One of the most recognised names in providing mortgages for contractors and freelancers across the UK.
In 2004 John began his career in Financial Services as an independent mortgage adviser and broker. John has been instrumental in negotiating bespoke underwriting for contractors with high street lenders.
His presence in the industry as a go-to expert is growing by the day and he is regularly cited and writes in publications both locally and nationally.