Written by: Keoghs Solicitors
Date: 12th June 2023
The continuous rise in interest rates and uncertainty as to when it will end has caused unease with many lenders, resulting in hundreds of mortgage offers being pulled from the market.
HSBC even temporarily suspended it’s residential and buy to let products with a view to rerelease with higher loan rates at a later date. There are concerns that other lenders may follow suit.
The current Bank of England base rate is at 4.5%, and it is widely expected to rise again at its next review on the 22 June 2023.
The increase in interest rates is having a significant impact on the property market since the number of available mortgage products are shrinking and the products on offer are at a higher rate. Borrowers who are looking to buy or remortgage will have to pay a lot more now than if they had taken out the same mortgage a year or more ago.
Home owners on fixed rates coming to an end this year should be expecting significantly higher monthly repayments.
There are also reports of a growing number of First Time Buyers electing for longer mortgage terms of 30 to 35 years instead of the standard 25 years in an effort to spread the monthly costs to a more affordable monthly rate. Increasing the term or length of a mortgage reduces the monthly repayment amount, but it means borrowers pay more in interest over the life of the loan.
We would recommend that anyone looking to remortgage or purchase a property consult with a qualified mortgage broker or financial advisor in advance who will be able to advise on the available products to suit affordability based on personal circumstances.
If you are looking to buy your first home or looking to buy or remortgage a property please contact Becky Tang or any other member of the Keoghs Nicholls Lindsell and Harris Property Team on 0161 456 8125/0161 928 9321.