Sharp also says the brand is focused on growing its market share, and has been regularly reviewing and repricing mortgage products across its range to ensure it offers competitive options for a variety of buyers.
Archer also refers to levels of competition within the mortgage market as a driver behind rates falling below 1 per cent. “[Lenders] want to grow their books. I don’t think there’s many lenders in the market whose stated aim is not to grow at the moment.”
High LTV borrowers
Danny Belton, head of lender relationships at Legal & General Mortgage Club, says rates could fall further than the 0.79 per cent rate offered by Platform.
And while borrowers at higher LTVs typically pay higher rates, Belton says the sub-1 per cent rates could also have a knock-on benefit for high LTV borrowers.
“A lot of lenders, on the flip side, are limited as to the amount of business they can write in certain niche areas. So if you were to take high LTV loans, there’s a limit that they can do,” Belton says.
“If they’re writing more at a low LTV, the chances are we might be able to see more competition at a higher LTV as well. Because that does create a bigger margin for lenders and that will help balance their books. So we could see some really positive outcomes at both ends of the scale here.”
For borrowers at lower LTVs who are thus eligible for a sub-1 per cent rate, Sellar at Santander says there are no “extra hurdles to jump over”.
“You must meet affordability. You’ve got to meet the lender’s credit score and criteria, but there’s no extra policy to jump over to get those rates. They’re available for all customers at those LTVs,” he adds.
Aaron Strutt, product and communications director at Trinity Financial, says that while some borrowers are sceptical whether they really can qualify for a cheap mortgage, many clients are locking into sub-1 per cent rates.
Indeed, Sellar at Santander says it has seen borrowers favour a five-year fixed rate below 1 per cent over a two-year fix.
“We’ve got rates below 1 per cent for two years, and rates below 1 per cent for five years. It’s the five-year rate which is selling more.
“Customers are saying to themselves, I want to fix for longer, because actually that rate below 1 per cent is amazing, and I can get five years of that rate.”
So how long until we see rates potentially rise?
Sellar mentions the Bank of England’s term funding scheme, which is due to end on October 31 and enables banks to access money from the BoE at approximately 0.1 per cent – another reason why some mortgage rates have continued to fall.
