Mortgages
Gary Goodwin
Welcome to April’s Mortgage Monthly column.
This month we look at why speed can sometimes be of the essence when it comes to mortgage decisions.
Since the UK exited Covid, the mortgage market has seen its fair share of challenges both internally through regulation changes as well as external challenges.
When challenges such as the current geopolitical issues in the Middle East cause uncertainty and rapid change for our clients it highlights the need for good, speedy advice – something our advisers pride themselves on delivering.
The war in Iran started at the end of February and had an almost immediate effect on mortgages with many lenders changing or withdrawing deals at short notice.
We have seen lenders emailing advisers informing them products will be pulled the same day, giving clients only hours to secure a deal.
This led to frantic attempts to get hold of clients who have not committed to a new rate to replace their current mortgage deal when it ends.
By March 23, around 1,500 individual mortgage products had been pulled from the market, according to industry publication Mortgage Strategy.
While this is not quite on the scale of the 900 rates pulled in a day in 2022 after the Liz Truss mini-Budget, it does show the profound impact that events over 4,000 miles away have had on UK mortgages.
Deals which do remain don’t stay around for long – in February, mortgage products stayed available for an average of 33 days; by March this had dropped to 14 days.
The initial reaction to the war seems to have settled with fewer rates being withdrawn from the market and some early signs of minor falls in average mortgage rates.
However, long-term stability remains in doubt, particularly in a situation which has been unpredictable from its inception and has already seen extensive swings in sentiment and market reaction.
In times like these, talking to experienced mortgage advisers who can give quick, concise advice looking at the whole of the market can really help with decision-making.
Reaching out or making time to speak to your adviser when they get in touch in the lead-up to a mortgage rate coming to an end cannot be underestimated.
Being prepared to make quick decisions to lock in a rate can ensure that if rates rise you have taken advantage of what is best for you at the time.
Locking in a rate during a rising rate environment through an adviser will come with other advantages.
Lenders offer a four to six-month lead-in period to secure a product.
As a result, for example, if rates start to drop – as they did in the first week of April – you can switch to a cheaper one, should one become available. An adviser can help with this research and scour the market for good deals.
After 2022’s volatile period where rates spiked, we saved one of our clients more than £11,000 over the term of their mortgage by switching the initial rate they secured to a cheaper rate before their current deal expired.
Of course, this was a number of years ago and every individual’s circumstances are different so this would not necessarily be the case now.
In a fast-paced, unpredictable world, being prepared to make quick, evidence-based decisions when it comes to securing a suitable mortgage rate can help save you money should rates increase.
Using an adviser can ensure that you end up with the best rate available to match your circumstances at that time.
If you are concerned about a current deal that is soon coming to an end, reach out to your adviser so they can give you the correct timescales to secure a new rate.
And for help on buying a home – whether you’re a first-time buyer or someone looking to move house – get in touch with one of our mortgage advisers today.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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