Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Cheap mortgages could free up cash for investing
A sudden decline in mortgage costs could benefit anyone trying to find ways to put more cash into their savings and investments.
Individuals taking out a new mortgage or simply remortgaging could get a great deal over the coming weeks, potentially leaving more money in their pocket for other things in life.
So why do we think this positive situation will arise? It’s down to talk of a potential mortgage price war after Yorkshire Building Society launched a mortgage product with a rate below 1%.
Yorkshire’s 0.99%, two year fixed rate deal is available to borrowers with a 40% deposit.
Breaking below the psychological 1% barrier could trigger more mortgage providers to cut their rates in order to win new business.
Discussing the Yorkshire product, L&C Mortgages’ associate director David Hollingworth says: ‘This rate is astonishingly low and on par with the lowest ever – but the fee is £1,495 and there’s no help with other set up costs like valuation.’
Anyone lucky enough to get such a cheap mortgage deal should look at their finances and work out how much cash is left over after paying the bills to put into the stock market as long-term savings.
We’d suggest you set up a monthly direct debit so you drip feed cash into an ISA or self-invested personal pension (SIPP).
It is possible to invest in shares or funds with transaction fees as low as £1.50 if you use regular investment schemes. Most investment platforms offer this service. (DC)