Contractor Mortgage rate war intensifies with launch of sub-1% fixed rate

Interest rates on mortgages available to contractors hit a new historic low this week with the launch of an unprecedented sub-1% fixed rate.

Platform, part of The Co-operative Bank, launched a two-year fixed rate at just 0.95%, the first in the market. HSBC followed that up this week with a 0.99% fixed rate of their own, as the mortgage rate war intensified.

“It has been true for some time now that the availability of products for Contractor Mortgages is the best it has ever been” said Andy McBride, director of Cleerly. “These first two sub-1% rates certainly indicate a hunger to do business that has seldom been seen previously, especially considering the state of the financial industry right now.”

Amid increasing inflation, the concern for mortgage borrowers has rightly been around when, and not if, rates increase. Especially given the current historic low Bank of England Base Rate at 0.1%. As ever, however, the devil is very much in the detail when it comes to headline grabbing interest rates.

“Taking the two sub-1% products as an example, the reality is that very few mortgage applicants presently in the market will qualify for those” adds McBride. “HSBC are a traditionally risk averse lender, and as far as contractors are concerned will largely only ever lend based on salary and dividend draw. Platform, however, are a lender who we work with regularly for Contractor Mortgages, using our bespoke underwriting policy with them.”

Unlike other brokers, even other contractor specialist brokers, Cleerly have a wealth of experience from across the industry, and from across the niche range of options available to Contractors, something that is helping many clients who have enquired elsewhere without success.

“We are seeing more and more that, even with specialist brokers, situations are presenting themselves that consultants just don’t understand, causing clients to come to us to help overcome the issues” continues McBride. “There are several instances recently where we’ve successfully got clients to mortgage offer who had suffered either sub standard service elsewhere, or worse still been turned away.”

“These type of market leading rates are unlikely to hang around for long. Don’t hamper your chances by choosing the wrong broker.”

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