Quantock Financial

What to consider before remortgaging...

With mortgage rates at their highest since the 2008 financial crisis 1, those looking to remortgage have more to think about than usual.
Many whose deals are coming up for renewal will have agreed their mortgage at a time when Bank Rate was just 0.1%. Now, it stands at 5.25%.
If your deal is coming to its end, what do you need to think about before signing on the dotted line?
Start early!
When your current mortgage deal expires, you’ll automatically be moved to your lender’s Standard Variable Rate (SVR) – their rate outside of any mortgage deals. Usually, this rate is higher than other types of mortgages, so you should always look to secure a new deal ahead of your current one expiring.
Consider a tracker or variable rate mortgage
Whilst fixed-rate deals are a popular choice for mortgage holders, they may not always be the most suitable choice while mortgage rates are high or the economy uncertain. A variable rate or tracker mortgage moves up and down with Bank Rate – so while your payments could go up, they could also come down in the future.
Take advice
Our experts are here to advise you and help you select the most suitable mortgage product for you, so please talk to us if you have any concerns.
Your home may be repossessed if you do not keep up repayments on your mortgage.
1 Money Facts, 2023
Sources:
1https://moneyfactscompare.co.uk/news/mortgages/average-two-year-fixed-mortgage-surpasses-mini-budget-peak/

Considering choosing a ‘mammoth mortgage’?

A standard mortgage used to run for 25 years but there is a growing trend for so-called ‘mammoth’ loans spread over up to 40 years as first-time buyers and movers opt for lower monthly payments.

A dramatic increase

According to UK Finance, the last two years have seen a dramatic increase in 40-year mortgages. In February 2023, 18% of all first-time buyers opted for a mortgage term of 35 years or more, compared to 8% in February 2022. According to Moneyfacts, 67% of all mortgage products currently available have a standard maximum term of up to 40 years.

At what cost?

The main benefit of borrowing over an extended period is that it helps with affordability, but at what cost? You’ll end up paying more interest overall.

A longer term may allow you to borrow more, so you’ll need a smaller deposit. However, you’ll need to be aware that the equity in your home won’t grow as fast as you’re paying the debt back more slowly.

You’ll also need to consider whether a longer mortgage term will mean that repayments carry on into retirement.

We’re here to help

If you’re thinking of extending your current mortgage to reduce your monthly outgoings or you need advice on a new mortgage, it’s always best to speak to an adviser.

Your home may be repossessed if you do not keep up repayments on your mortgage

BANK RATE & THE MORTGAGE MARKET

Mortgage holders have been on a rollercoaster these past 12 months, with rising rates changing the state of the mortgage market. Thankfully, clear-headed thinking is the antidote to market volatility.

Monthly movements
After a decade of ultra-low interest rates, the return to rates around 5% has been a shock to the system for many mortgage holders. Mortgage rates have settled somewhat since the uncertainty caused by the mini-Budget, but they still remain higher than before September 2022.
The result is higher mortgage repayments for many mortgage holders, putting a further strain on household budgets.

To fix or not to fix?
In an environment of rising rates, the certainty offered by fixed-rate deals can seem appealing. Having a fixed-rate deal offers a guaranteed interest rate, which means monthly payments will be the same from the start to the end of your term. The ability to plan your budget is a big plus, but your monthly payments won’t fall if interest rates do.

Here to help – whatever the interest
With inflation remaining stubbornly high, we’ll continue to monitor developments in Bank Rate and the mortgage market. Wherever your property journey is heading, we’ll help you navigate the market.

Your home may be repossessed if you do not keep up repayments on your mortgage

Honouring His Majesty King Charles III on the historic occasion of his coronation.

Our offices will be closed on Saturday 6th May and will reopen on Tuesday 9th May

Yesterday saw our first Quantock Business Referral Group meeting at The Corner House Hotel - thank you to all who attended - we hope it will be the first of many.

Very happy to announce Piers Colegate has now joined Quantock Financial - Piers is an experienced Mortgage and Protection Adviser and brings a wealth of knowledge! Exciting times ahead… Welcome Piers!

Not completely finished… but up and running!

Annual house price growth has slowed down slightly in April, but has remained in double digits for the 11th time in the past 12 months, the latest Nationwide House Price Index has today revealed.

Nationwide reveals April house price index Industry reacts to newly-released figures

The surge in London property prices continued apace in March despite the cost-of-living crisis, with homes there rising at their fastest rate since 2016, according to Nationwide.

London house prices on the rise again Fastest increase in six years as capital's appeal attracts buyers

“After two years of Covid and dealing with the economic ramifications of a pandemic, we now have serious global security issues to contend with, and while those rate concerns pale into insignificance when compared to what is happening elsewhere, it may still be a source of worry for many.”

In her most recent blog piece for the Financial Reporter, Joanne Carrasco discusses the current mortgage market and rate fluctuations. 📈

Read more in the below:

https://lnkd.in/dceW4DpX

Rate fluctuations are not new, but the current situation underlines the need for advice - Stonebridge In our marketplace, rate changes are nothing new. Mortgage product rates change every single day and that is a big part of why our sector is so dynamic

The Bank of England’s Monetary Policy Committee (MPC) has voted to increase the base rate from 0.25% to 0.50%.
This increase represents the first back-to-back rise in interest rates since 2004, after the MPC elected to up rates from 0.1% to 0.25% in December.

BoE ups base rate to 0.50% - Mortgage Introducer The Bank of England’s (BoE) Monetary Policy Committee (MPC) voted unanimously to increase the base rate from 0.25% to 0.50%.

The market share of new-build transactions fell to 2% in 2021, from 10% in 2020 and 13% in 2019, according to research by Unlatch.

New-build transactions drop to 2% market share - Mortgage Introducer New-build transactions fell to 2% in 2021 from 10% in 2020 and 13% in 2019 as a result of the pandemic, according to Unlatch.

Mortgage availability as a whole has continued to improve, with 5,394 fixed and variable rate mortgage products included in this month’s moneyfacts.co.uk research, up from 5,315 in December 2021. This is the highest level of total product choice seen in the past 13 years.



https://moneyfacts.co.uk/news/mortgages/bank-of-england-rate-hike-filters-through-to-mortgage-deals/

Bank Of England Rate Hike Affects Mortgage Deals | moneyfacts.co.uk The Bank of England’s surprise December interest rate increase has begun to filter through to the mortgage market, pushing up the cost of both fixed and variable rate deals.

First Christmas on the Quantocks…

Taunton came out on top in the Halifax hotspot list in 2021!

UK's biggest house price winners and losers revealed for 2021 Wales is identified as the nation or region with the biggest annual jump in prices - as many buyers look for more space and access to the countryside.

Rightmove predicts that the national average price of property coming to market will rise by 5% next year, as strong buyer demand and a historically low level of available property continue to push up prices in 2022.

House prices to rise nationally by 5% in 2022: Rightmove Rightmove predicts that the national average price of property coming to market will rise by 5% next year, as strong buyer demand and a historically low level of available property continue to push up prices in 2022.

Annual house price growth remained strong in November at 10.0%, marginally higher than the 9.9% recorded in October, according to the Nationwide Building Society’s latest house price index.

Nationwide: house prices up 0.9% month-on-month | BestAdvice Annual house price growth remained strong in November at 10.0%, marginally higher than the 9.9% recorded in October, according to the Nationwide Building Society's latest house price index.

🧱 Help to Build, the government’s latest equity loan scheme, has launched offering self and custom builders the opportunity to start their home building project with a minimum of five per cent deposit.

Help to Build scheme open to applications this winter - Mortgage Solutions Help to Build, the government’s latest equity loan scheme, has launched offering self and custom builders the opportunity to start their homebuilding project with a minimum of five per cent deposit.

“The government may need to assist the buy-to-let market in reaching its target of a C EPC rating across all properties by 2025, according to Paul Brett, managing director of intermediaries, at Landbay.”

Find out more in this recent article from Introducer:

https://www.mortgageintroducer.com/mbe-2021-govt-may-need-to-step-epc-ratings/

MBE 2021: Government may need to step in with EPC ratings - Mortgage Introducer When looking to green mortgages, Paul Brett from Landbay said that the government may need to assist the buy-to-let market.

“Now may be the best time for your clients to consider remortgaging as we could be reaching the end of a golden age for cheap mortgages according to Hargreaves Lansdown.”🏘️

Find out more in this recent article with Mortgage Introducer:

https://www.mortgageintroducer.com/this-could-be-the-end-of-the-cheap-mortgage/

This could be the end of the cheap mortgage - Mortgage Introducer With an interest-rate rise on the horizon, clients should consider remortgaging now while mortgages are still cheap and easy to access.

What is driving sub-1% mortgage rates? Remarkable unbelievably cheap and astonishingly low are some of the words that have been used to describe the recent fractional mortgage rates

“The rate war that began before the summer has since continued in what has already been a memorable market, following an extended stamp duty holiday and the launch of the mortgage guarantee scheme.”

Find out more about what is driving sub-1% mortgage rates in this recent article from Financial Times:

https://www.ftadviser.com/mortgages/2021/09/30/what-is-driving-sub-1-mortgage-rates/

What is driving sub-1% mortgage rates? Remarkable unbelievably cheap and astonishingly low are some of the words that have been used to describe the recent fractional mortgage rates

“Just 15% of working age people believe that the government’s Mortgage Guarantee Scheme could apply to them ”🏠

Find out more about the Mortgage Guarantee Scheme in the recent Mortgage Introducer article below:

https://www.mortgageintroducer.com/15-believe-mortgage-guarantee-scheme-apply-them/

Just 15% believe Mortgage Guarantee Scheme could apply to them - Mortgage Introducer Just 15% of working age people believe that the government’s Mortgage Guarantee Scheme could apply to them, according to NerdWallet.

“With rates falling rapidly for larger deposit holders, experts think it’s only a matter of time before lenders start cutting rates for smaller deposit holders.” ✂️

Find out more in the recent Financial Times Adviser article:

https://www.ftadviser.com/mortgages/2021/08/05/smaller-deposit-holders-told-to-expect-rate-cuts/?page=1

Smaller deposit holders told to expect rate cuts With rates falling rapidly for larger deposit holders experts think it s only a matter of time before lenders start cutting rates for smaller deposit holders

Halifax have just released their latest House Price Index. 🏘️

The report shows that house prices rose again in July – though slower annual growth points indicate a cooling market.

Other key points highlighted in the report:

• Annual house price inflation at 7.6% compared to 8.7% in June
• Average UK property price now £261,221, up 0.4% in July
• Wales records strongest house price growth since 2005

Read the report for more insight: ⬇️
https://www.halifax.co.uk/assets/pdf/july-2021-house-price-index.pdf

New 0.99% rate from HSBC…

HSBC offers sub-1% mortgage product | Mortgage Introducer HSBC UK has refreshed its product rates with up to 0.20% cut on over 20 mortgages across all loan-to-values (LTVs).

House prices jump 10.9% as 'race for space' intensifies Prices in the year to May were the strongest for seven years as buyers seek gardens and more space, Nationwide says.

Explored the Quantocks from home a bit more today...