Tuesday, December 19th, 2023
Navigate rising mortgage rates, UK market trends, and the role of brokers with your guide to the ‘New Norm’ in mortgages from Caboodle Finance.
After a decade of “almost free money” in the market where mortgage rates starting with a 1 were readily available for many borrowers, (and where for a short period in 2021, even lower rates were being offered by a handful of lenders), those looking to buy or remortgage now may need to accept that that for the foreseeable future, the new norm means that mortgage rates are likely to start with a 4 or even a 5
With a backdrop of pessimistic growth projections for the UK and a higher than target inflation, it is unlikely that mortgage interest rates will or can go much lower than they are currently, even though the last few months or so have seen mortgage lenders reducing rates in a battle to secure some business in a quiet property market.
Given the property and mortgage markets are in a state of flux, many borrowers are looking towards mortgage brokers to help guide them in their search for the most suitable, and in many cases, the most cost-effective mortgage solution to meet their needs.
This has proven to be an effective strategy for many borrowers in recent months as the mortgage broker will have been able to closely monitor ongoing activity in the market to make sure any preferential product offerings that become available are passed on to their customers, be it for purchase mortgages, remortgages, or product transfers.
The higher rate environment is proving challenging for many mortgage holders who are close to or have already come to the end of their previous fixed rate period, as they will have experienced the “payment shock” of potentially having to move from a repayment calculated at a rate around 1 or 2 percent to one that has a rate around the 5 or 6 percent mark.
Although some borrowers may look for advice and guidance from their existing mortgage provider, many lenders will not be able to provide ‘advice’ or ‘recommend’ a solution in the same way a mortgage adviser would. In fact, they are more likely to offer a range of options and then ask the customer to choose one for themselves. This route is fraught with potential danger as borrowers with limited knowledge or understanding of how mortgage products, rates, and fees work may not select the most suitable option that best meets their needs and requirements.
Even borrowers with a reasonable grasp of the mortgage world may end up being blinded by ‘headline mortgage rates’ rather than digging down into the finer details of product fees, early repayment charges, and other factors that should always be considered in the round when choosing a mortgage.
With all that in mind, it is no surprise that many borrowers, prospective and otherwise, use the services of a professional broker to help them identify the best options that are available that are based on their circumstances.
Please check out what our clients think of the service they have received from us by viewing our testimonials page located HERE.
Thereafter, if you would like to make a confidential, no-obligation enquiry, just call one of the friendly experts here at Caboodle Finance of Sutton Coldfield, Birmingham today on 0121 308 9114. Alternatively, just click HERE to contact us via our website and we will be in touch.
We very much look forward to speaking with you, but in the meantime, may we take this opportunity to wish everybody a happy Christmas and a prosperous New Year.
The information contained above was correct at the time of publication but is subject to change.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Caboodle Financial Services Ltd
Mere Green House
46-48 Mere Green Road
Sutton Coldfield
West Midlands B75 5BT
Telephone: 0121 308 9114