UK Mortgage & Property Related News
I’ve nearly finished a two-year fixed rate and starting to look at remortgaging soon. I bought my property at the end of 2022, and it needed quite a lot of work. I’ve upgraded the kitchen, bathroom and redecorated throughout.
When I bought the property it was £325,000 and it’s now worth £375,000. Will this be taken into account when I remortgage?
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The government’s plan to get 80,000 young people on the housing ladder with a permanent mortgage guarantee scheme may not have the desired impact, new figures have revealed.
Labour has pledged to make the previously-temporary scheme a permanent fixture as part of a package of measures to boost the housing market.
The mortgage guarantee scheme allows lenders to provide 95% mortgages to households with the backing of the government.
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Landlords are not reaping as bigger benefit from recent mortgage rate cuts as those who live in their own homes, analysis shows.
The interest rates on fixed home loans have been dropping for weeks after falls in inflation and a cut in interest rates by the Bank of England.
Falls have been seen across all types of mortgage, but the more dramatic drops have been seen on residential deals.
Experts have said the trend is due to a combination of buy-to-let mortgages being seen as riskier for lenders, and greater competition in the residential market.
According to data from Moneyfacts analysed by i, at the start of July, the average five-year fixed residential mortgage at 75 per cent loan-to-value (LTV) – meaning a deposit or equity of 25 per cent – stood at 5.39 per cent. For the equivalent buy-to-let mortgage, the rate was 5.59 per cent.
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The trend of lenders cutting mortgage rates is unlikely to be ‘disturbed’ by the first inflation rise of the year, according to experts.
Inflation rose to 2.2 per cent in the 12 months to July, up from 2 per cent the previous month, ONS figures revealed earlier today.
While it means inflation is back above the Bank of England’s 2 per cent target, it was a smaller-than-expected rise with markets expecting a 2.3 per cent increase.
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Some £30bn is expected to be gifted to first-time buyers in the next three years, according to estate agency group Savills.
Last year £9.4 billion was gifted to 164,000 first-time buyers, accounting for a huge 57% of all mortgaged first-time buyers.
Frances McDonald, director of residential research at Savills, said: “While many homebuyers enjoyed record-low interest rates during the early part of the decade, more stringent mortgage requirements, which have been in place since the start of the pandemic, have impacted higher-loan-to-value (LTV) lending, most commonly used by first-time buyers.
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The average price of a newly marketed UK home has dropped by more than £5,000 month-on-month in August, as the distractions of school summer holidays traditionally bring a dip in prices.
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I have a second home, a small two-bed flat, which I own with a £93,000 repayment mortgage fixed at 2.69 per cent until October 2025.
The mortgage is set to be paid off in October 2035, and my main home is already paid off. Currently, my daughter lives in the second home rent-free.
Once she moves out later this year, I need to consider whether to change the mortgage to buy-to-let and rent the property out.
Early rental valuations indicate that the rent will cover the mortgage.
I have recently retired, although I am not due to get my state pension for another seven years.
Should I use the tax-free pot from my private pension to pay off the mortgage and use the rental amount as monthly income? What should I take into consideration?
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The average shelf-life of a mortgage product has dropped to just 17 days, down from 30 days a month, according to Moneyfacts.
Average mortgage rates on the overall two- and five-year fixed rate deals fell month-on-month by 0.18% and 0.15% respectively, halting five consecutive months of rises. These rates are now at their lowest level since March 2024.
The overall average two- and five-year fixed rates fell between the start of July and the start of August, to 5.77% and 5.38% respectively. The average two-year fixed rate is 0.39% higher than the five-year equivalent. The two-year fixed rate has now been higher than the five-year equivalent since October 2022.
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Half a million homeowners are on ‘rip-off’ mortgage rates of up to 9.24 per cent due to easy mistake. Borrowers who fail to take out a new mortgage in time before the term ends are automatically shifted on to their lender’s Standard Variable Rate (SVR) where costs can top 9.24%.
The average two-year fixed rate is currently 5.66 per cent, according to data site Moneyfacts.co.uk, while the average five-year fix is 5.3 per cent. In comparison the average SVR is a whopping 8.16 per cent, the Sun newspaper has reported.
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There are a few scenarios where refinancing your mortgage could make sense:
It will allow you to get a lower interest rate. You might refinance if doing so will allow you to lower your interest rate, either because “interest rates have dropped since you first obtained your mortgage” or “your credit score has improved since taking out your current loan,” said Bankrate. Ideally, your new rate will be “one-half to three-quarters of a percentage point lower than your current rate” to offset costs associated with refinancing.
You want to change your loan term or structure. Refinancing can also make sense if you’d like to change your loan’s term or structure. For instance, maybe you want a longer repayment term to lower your monthly payments or maybe you want a shorter term to lower the amount you’ll pay in interest. Or, maybe you “have an adjustable-rate mortgage that’s about to convert to the variable-rate period,” in which case “you could refinance to a fixed-rate loan to guarantee predictable monthly payments,” said Bankrate.
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