What’s going on with Mortgage Rates? – Your questions answered
Mortgages have been in the news a lot recently, so we’ve broken down the most common questions we get from the clients we’re speaking to.
Whether your concerned about your current mortgage payment increasing, looking to move home, or are a first time buyer looking to get on the property ladder, we’re here to help.
You can Book an Appointment to speak to one of our friendly, expert advisers at a time and place that suits you.
Q: What is happening with Mortgage Rates?
A: Unless you’ve been living under a rock for the last couple of weeks you can’t have escaped the news that mortgage rates have been increasing dramatically.
Rates have actually been rising steadily all year but the Chancellor’s “Mini Budget” on 23rd September has accelerated this due the uncertainty in the financial markets and the expectation that the Governments actions will put pressure on the Bank of England to further increase the Base Rate.
Mortgage Lenders reacted by withdrawing some products and increasing the rates on what was left by as much as 1.5% to 2% in some cases.
Q: My current mortgage deal is coming to an end soon. What should I do?
A: The most important thing is to act fast. The longer you leave it to take action, the more time there is for rates to increase further, potentially increasing your monthly payment by hundreds of pounds.
Most mortgage offers are valid for 6 months and with an average time from application to offer of around a month, you can apply up to 7 months ahead of your current rate ending.
Once your application is submitted the rate is secured, provided your application is agreed by the lender.
Q: Can I get a new rate from my current lender?
A: In most cases, the simple answer is yes. However, it’s not necessarily that simple.
Whilst most lenders will offer you what’s called a Product Transfer, to switch to a new rate at the end of your current deal, there time limits on when you can apply for this.
Some lenders will let you secure a new rate 6 months before your current deal ends but the majority of them will only allow it if you are within 3-4 months of your existing rate finishing.
This means you could have to wait several months longer to secure a rate with your current lender compared to remortgaging to a new lender.
Q: Do I need to use a Mortgage Adviser?
A: Of course we’re going to say yes to this one aren’t we?
- There are numerous benefits to using a Mortgage Adviser to help you find your next deal:
- We are the experts. We do this day in, day out, and our sole aim is to find the best mortgage deal to suit your specific needs. We work for you not the lender
- We have access to exclusive deals that you can’t access directly
- We know the lenders’ criteria so we can make sure your application is more likely to be accepted
- We can also deal with your existing lender in most cases so, if a Product Transfer with your current lender is the best deal for you, that’s what we’ll recommend
- There’s no cost to you for an initial consultation to review your options
- We make it as easy as possible to speak to us. You can come and see us in the office or have a video or telephone appointment if that’s more convenient.
Q: What if rates come back down before my current deal ends?
A: A lot of people have been asking this question, and understandably so.
What happens if you rush to secure a new rate but then, before your current rate comes to an end mortgage rates come down?
Applying for a mortgage secures that rate provided you receive a mortgage offer, but the new deal won’t actually start until you say so (normally when your current rate comes to an end). Up until that point you can change your mind for any reason, including if there’s a better offer.