Interest-Rates.Info

Many of us envisage retirement as a peaceful winding down after several decades of hard work.

But an increasing number of mortgage holders face having to put their relaxation on ice as they’re left with no choice but to work past their pension age to pay off long-term mortgages.

Homeowners are still reeling from painful interest rate increases by the Bank of England that pushed high street mortgage rates as high as 6.8%. Those who have taken out or renewed their mortgage in the past year have likely had their monthly payments rocket.

A recent BoE report revealed nearly half of all mortgages issued in the last three months of 2023 were for 30 years or longer, while two in five were issued to borrowers who would be past state pension age at the end of their mortgage term.

Different figures from UK Finance show 41,580 first-time buyers took out mortgages with terms of 30 years or more in the last quarter of 2023, of which around 15,700 (38%) were longer than 35 years.

This tip works because you end up reducing the amount of money you have to pay in interest, which can build up over the years. But by making overpayments, you can cut down the extra cash you need to pay and reduce the length of your mortgage term.

Homebuyers and remortgagers spend more time choosing home appliances than digesting mortgage deals, a study claims, as homeowners report the fast-paced mortgage market is making them stressed.

A sixth of homeowners said they felt pressured into making a quick mortgage decision due to the rapidly changing market, according to research by Smart Money People, with 57 per cent reporting that they felt stressed as a result.

A quarter of buyers and remortgagers said the mortgage process had left them confused.

On average, homeowners spent less than half a day looking at mortgage options before diving into a deal, Smart Money People said – this is less time than they spend considering which coffee machine or air fryer to buy.

Rightmove house price index.

Data from the property website shows that the average price of a house being listed dropped by just £21 in June — statistically giving a zero percent change on the previous month.

This means the average asking price of a property for sale is now £375,110, broadly the same as May, which was a record high. Rightmove says this follows seasonal patterns of prices stagnating at this time of year, with election uncertainty adding to this summer lull.

This national average masks considerable regional differences though. Rightmove says there is stronger growth in northern regions where property prices are lower. Five of the six cheapest regions have reached new price records, while the higher-priced East of England and London lag behind, according to its data.

While mortgage market health is currently being driven by those looking to remortgage, there’s unlikely to be a resurgence in activity until rates start to fall.

This is according to Octane Capital chief executive Jonathan Samuels who points out that gross lending has sunk to its lowest since interest rates increased, driven by a reduction in house purchase lending.

The latest market analysis by Octane Capital has looked at gross mortgage lending by sector and how this figure has changed both quarterly and over the last year.

The analysis of gross mortgage lending figures from the Building Society Association shows that total mortgage lending sat at just £50.5bn during the first quarter of 2024, the lowest level seen since interest rates started to climb in December 2013.

Mortgage rates are not directly set by the government but rather by lenders influenced from factors such as the Bank of England base rate of interest and general Inflation. Events such as elections can impact interest rates due to the uncertainty.

Data from Mojo Mortgages helps us to understand the changes in mortgage rates since the announcement of the election 2024.