Homeowners to look to foreign mortgage lenders?
Mortgage lenders in China, Israel and Sweden are offering better deals on housing loans than banks in the UK, according to one industry figure.
Mark O'Sullivan, director of trading for Currencies Direct Limited, believes that the workings of the mortgage market could be altered if UK residents decide to take advantage of the better deals offered by foreign companies.
The Times recently reported that mortgage lender Bank of China is offering a variable-rate deal with a loan-to-value of 25 per cent and arrangement fee of £995 for properties up to £1 million.
It is also undercutting UK mortgage lenders by asking for 100 per cent of rental income, compared to the typical rate of 125 per cent in this country.
Mr O'Sullivan said that banks in China are well-capitalised enough to think about moving into the UK market, especially at a time when the big four banks are refusing to offer any worthy deals to British households.
" Mortgage rates are actually going up rather than coming down over the long-term. With the base rate as low as it has ever been, half a per cent, you would expect to see some fantastic deals out there, but it's actually the opposite," he added.
"It may be that this is kind of a watershed, that maybe the mortgage market in the UK will change forever. Maybe it will be foreign banks that come into the market that offer the best deals, it could actually be a complete change around."
Recent research by financial advice website Moneyfacts showed that there are no mortgages available today which are long-term and fixed-rate.
Despite calls by prime minister Gordon Brown to increase the number of the mortgages to help reduce market volatility, there are currently no opportunities for homeowners to secure a long-term fixed-rate deal, according to the report.
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