Mortgage rates: what’s really happening and what it means for you
With rising Interest rates dominating the headlines, our Financial Services Partner, Mortgage Medics, shed some light on what this means for the housing market and mortgages.
We’ve been flooded with headlines highlighting the inflation surge and the Base Rate climbing to a significant 5%. Yet, beneath this tumult, what’s the actual scenario in the realms of property and mortgages? As the swirling dust of financial upheaval begins to settle, let’s delve deeper to decipher the real story unfolding. We talk to Sam Murphy, Managing Director at our partners Mortgage Medics, about what this means for the market and what to look out for.
“As soon as disappointing inflation data was released on 18th May, economists started predicting that interest rates would have to go up when the Bank of England met in June, and so this proved to be the case.
Prior to the Bank of England announcement, markets adjusted and lenders repriced their products. This led to us having to act quickly to secure rates for people in the process of remortgaging or agreeing a purchase, but whilst there was disappointment, there was no panic and property chains didn’t break down.
Now whilst none of us is enjoying the prospect of higher mortgage payments, it’s important to note what isn’t happening; mortgage products aren’t disappearing, lenders aren’t closing their doors to new business, and we’re not consumed by panic. Contrast this to the Credit Crunch of 2008 when structural failures of the system caused all sorts of chaos.
What this means is that the property market is still functional. Sellers will need to price keenly to attract buyers, but buyers might pick up what feels like a bargain, for the first time in a long time, as some homeowners find they need to sell quickly to alleviate financial pressures.
Potential First Time Buyers should still find the prospect of owning a property more appealing than pouring rent down the drain or another year living with parents (even if that means leaving mum’s magic washing basket behind!).
Whilst we should be under no illusions that a lot of homeowners will face pain when remortgaging, it’s important to take advice as there may be adjustments you can make to soften the blow of higher rates.
The most important thing is to make sure any new mortgage is affordable, and we’ll help with that. If you’re thinking of moving, don’t let the headlines put you off, talk to a reputable local estate agent, and talk to us. We’ll help you make the most of current market conditions.”
Whether you’re taking your first step on the property ladder, moving for the umpteenth time, a seasoned Buy-to-Let investor, or looking to release equity to make the most of retirement, Mortgage Medics have friendly, experienced advisers ready to help you explore your options. Get in touch today for a free initial consultation.