The full stamp duty holiday may have come to an end but the property market remains busy. A combination of the improving economic outlook, an abundance of mortgages, attractive rates and improving criteria (conditions borrowers must meet to be approved for a mortgage) means things are still looking good out there.
Indeed, mortgage lenders have been lowering rates – encouraged by the competition – as they attempt to capitalise on these fertile market conditions.
Low mortgage rates
In the last couple of months there has been a flurry of lower mortgage rates available onto the market, as lenders take advantage of this buoyant property and mortgage market. And there are some very competitive deals.
Some of the recent mortgage rate milestones include:
- The lowest ever two-year fixed rate at 0.83%
- The first ever sub-1% five-year fixed rate mortgages
- The first ever sub-1% Help to Buy mortgage rates
- The first sub-3% fixed rate for buyers with a 5% deposit since before the pandemic
- The highest number of mortgage products on the market since before the pandemic
For a lot of the best buy mortgage rates a 25% or 40% deposit/equity is required. So you should ensure you are speaking to a mortgage intermediary so we can sense check which products are the best option for your referrals.
However, the good news is that mortgage rates have been falling for buyers with lower deposits too. Mortgage rates for those with a 5%, 10% and 15% deposit/equity have come down significantly in the last few weeks.
You can check out some of the live best buy deals available using our website.
Mortgage product availability
As well as lower mortgage rates, it feels as if good news from mortgage lenders – in terms of new products and the type of borrower they will lend to – has been emerging daily in recent weeks.
This is backed up by recent data from Moneyfacts.co.uk. This has shown the number of mortgage products available has risen in August to 4,660, an increase of 417 products in the last month alone, which is the widest choice seen since March 2020.
How does this benefit me?
The increase in mortgage product availability is a reflection of how mortgage lenders are actively looking to return to areas of the market that were restricted for a large part of last year.
This means if you looked into your mortgage options in 2020 or early 2021 and found you could borrow less than you were previously told, or would struggle to obtain a mortgage, things may well now be better.
Some of the areas that we have seen notable criteria improvements include:
- Maximum borrowing
- Mortgages with a 5% and 10% deposit
- Mortgages for clients who have returned to work from furlough
- Interest-only mortgage options
- Ex-pat lending
- Specialist mortgages for self-employed clients, including those who have taken SEISS grants
- Lower mortgage rates
In relation to maximum borrowing, we have seen some significant improvements from lenders here.
Last year mortgage lenders would only lend 4.5x the borrower’s salary.
But we have seen in recent weeks lenders shift back to lending 5x salary for some client scenarios and even 5.5x for professionals or clients who meet certain minimum income requirements.
One major lender has even introduced new criteria offering a loan of 5.5x salary for first-time buyers only, to help get more people onto the housing ladder.
You can see for yourself how much you may be able to borrow using this link to our website, or for a more accurate assessment please get in touch to speak to one of our advisers directly.
Remortgaging
The good news for existing home owners is that these new lower mortgage rates are also available for those looking to remortgage.
October and December this year, as well as January next year, see a large number of UK home owners existing mortgage fixed rates come to an end.
We have access to mortgage lenders which allow you to apply and lock in a mortgage rate up to six months prior to the date you are looking to remortgage.
As such, if your current product ends in the next few months there has never been a better time to look into your remortgage options.
The updated criteria improvements can also benefit remortgage applicants. We are seeing a lot of our customers look to release equity for home improvement work when they remortgage, with a desire for more space another common factor behind the busy purchase market.
An intermediary can help discuss your scenario and requirements with both your existing lender and look other lender on the market for you, to ensure you apply for the best product for your circumstances.
You can view some of the best remortgage deals available using our website.
Please get in touch with us if you need any further advice. You can email us at AskAlexanderHall@alexanderhall.co.uk or use the contact us page on our website.
Greg Cunnington is director of lender relationships and new homes at Alexander Hall
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT
