UK expats set for mortgage boost as rates drop: comment

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The recent drops in expat mortgage interest rates combined with the effect of a weak housing market in the UK looks  set to give expat house buyers a significant negotiating edge in the busy summer buying period when many expats return to the UK, according to expat mortgage brokers Offshoreonline.

Offshoreonline – which is celebrating its 20th year of business this year – pointed that the availability of lower expat mortgage rates, whilst at the same time, many regions in the UK are reporting softer domestic housing demand and falling prices, something which “opens up opportunities for overseas buyers who are not affected by domestic UK economic pressure”.

Several lenders have begun to cut expat mortgage rates and reduce bank administration fees but while expat buyers remain concerned about possible mortgage interest rate rises, Offshoreonline spokesman Guy Stephenson believes that these may end up being “far more modest” when UK base rate does eventually increase.

“The period since the financial crisis has been one of abnormally low UK base rates, but equally unsustainably high bank margins, as banks have rebuilt their balance sheets,” he said.

“Before the 2008 financial crisis, many mortgage providers would typically aim for a margin of anything from 0.75% to 1.25% over UK Base when setting mortgage interest rates, but today, many lenders are still achieving nearly three times this level of mark up on loans.

“As and when UK base rates do rise therefore, lenders will have the ability to trim margins, so the impact on borrowers can be softened.”

Offshoreonline  is a UK based specialist expatriate and international  broker offering advice on UK, French, Italian, Portuguese and Spanish mortgages.

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