“War! Huh! What is it good for? Absolutely nothing, say it again,” implored Edwin Starr to a raucous funk beat in his 1969 hit 'War'.
But there’s a war about to break out in which the consumer may well end up being the real victor – and that’s the imminent dust-up that’s about to take place between Britain’s mortgage lenders.
High street banks are set to wheel out the big guns and offer tantalising, cut-price mortgage deals which could spell great news for first-time buyers and those who are looking to remortgage as of August 1st, so the next few months could be an ideal time to pounce.
The price war comes thanks to a bumper £80 billion pledge from the government which is intended to make it easier and cheaper for banks to borrow cash, on the condition that the savings are to be passed on to customers. It’s been designed to give the country’s ailing housing market the shot in the arm, and might help reinvigorate the wider economy.
“Since the government announced its Funding for Lending scheme to encourage more lending to UK homeowners and businesses, we’ve seen some great new mortgage deals hitting the market,” says James Cotton, mortgage expert at London & Country. “There’s now a real incentive for lenders to attract more mortgage customers and offering cheaper rates is an obvious way to do that. Lenders should be staying in a cautious mood so the best rates will be reserved for the people with lots of equity in their homes, but we’d hope to see some improvements across the board.”
While the market is set to heat up, with competition meaning better deals for consumers, it may take some time for all lenders to enter the fray. “We won't see all lenders competing for business but even a few of them fighting it out will mean better mortgage deals for borrowers,” says James Cotton. “ If you haven’t reviewed your mortgage rate in a while, the coming months should be a great time to see if you could save money by getting a new deal.”