Property Loans UK
What are the cheapest forms of property loans?
When it comes to property loans UK lenders offer three main types of package: homeowner loans, which you can use for almost anything; mortgages, which are for house purchases (or remortgages); and second mortgages, which supplement your existing mortgage. Interest rates differ dramatically.
With property loans UK lenders offer three main types: homeowner loans, which can be used for almost anything; mortgages and remortgages, which are for house purchases; and second mortgages, which are usually designed for big expenses such as home improvements. The cheapest form of loan is a mortgage, but homeowner loans are the most flexible.
With property loans UK consumers have a choice between flexibility and cost: mortgages are much cheaper than other forms of property loans, but they can only be used to finance house purchases or to replace an existing mortgage. Homeowner loans can be used for almost anything, but the interest rate is several percent higher than a mortgage; second mortgages are pricey too.
Although the interest rate has stayed calm in recent months, MoneyFacts (www.moneyfacts.co.uk) reports that mortgage rates have risen: the average fixed rate mortgage was 3.68% in June 2003, but 4.76% in December. No matter what kind of property loans UK customers might be considering, it seems that the cost of borrowing is beginning to increase – and the Bank of England base rate is expected to rise in 2004, which will have a knock-on effect on all kinds of borrowing.
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