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The Current UK mortgage market, some things to consider if you are remortgaging.
The current UK mortgage market has been affected by a number of factors, including:
- Rising interest rates: The Bank of England has raised interest rates ten times since December 2021 in an effort to combat inflation. This has led to higher mortgage rates, which has made it more expensive for borrowers to purchase or refinance a home.
- Falling house prices: House prices in the UK have been falling since the start of the year as a result of the rising cost of living and the higher interest rates.
- Reduced affordability: Rising interest rates have made it more difficult for many borrowers to afford the level of mortgage they would have been able to obtain prior to the rate increases. This is resulting in several lenders offering lower levels of borrowing than before. The Bank of England may continue to raise interest rates in an effort to combat inflation.
Despite these challenges, the UK mortgage market is still active, with a number of lenders offering more competitive rates now than at the end of 2022. However, it is important for borrowers to shop around and compare deals before making a decision.
Here are some tips for borrowers looking to get a mortgage in the current market:
- Get a good credit score: A good credit score will make it easier to get a mortgage. Make sure you pay your bills on time and keep your monthly credit commitments as low as possible.
- Consider your affordability: It is important to consider what you can afford to pay each month before you apply for a mortgage. Make sure you can afford the monthly repayments, as well as the upfront costs associated with buying a home.
- Compare deals: There are a number of lenders offering mortgages in the UK, so it is important to compare deals before you make a decision. Compare interest rates, fees, and terms to find the best deal for you.
- Get a deposit: Generally a deposit of at least 5% will be required to obtain a mortgage, however the larger your deposit the lower your interest rate will be.
- Get a mortgage in principle: Before you start looking at properties it is a good idea to get an agreement in principle. This will give you an idea of how much you can borrow but you should note that an agreement in principle is not an offer of loan.
Buying a home is a big decision but it can be a rewarding one.
Our team of financial advisors here at RCCW can help you establish what you can afford, review the market on your behalf, and advise on how to improve your credit score. Following that, they can then help you obtain an agreement in principle. By following these tips, you can make the process of getting a mortgage as smooth as possible.
Find out more about our mortgage services and our team here or contact us on 01224 332400 to arrange a no obligation free mortgage consultation.
