Funding for lending
What is funding for lending? A Government scheme aimed at providing cheap funding for lenders so they are able to lend at low rates themselves. Lenders are charged just 0.25% on this money by the Government on the basis that they then lend it onwards at competitive rates. In order to keep accessing the scheme the Banks have to keep lending as the money they borrow is based on their previous lending figures. Genius!
Do we like it? Yes we do! Since the launch in July 2012 we have seen residential, buy to let and commercial rates decreased and the appetite to lend is stronger. Smaller lenders have accessed the scheme with products aimed at first time buyer higher loan to value mortgages. The Bank of England recently announced they would extend the scheme to run to January 2015. This is great news and can only be good for the mortgage market.
We are seeing headline rates below 2% for borrowing below 60% and at 90% rates go down to below 4%. This is fantastic news for experienced borrowers and first time buyers alike.