How to find the best mortgage deal

Pressures on household finances have been headline news for months. The cost of living crisis with the proposed increase in energy prices and inflation above 10% has involved Government ministers and experts discussing solutions almost on a daily basis. However, one aspect yet to be given the same spotlight is the impact on mortgages.

Interest rates have been steadily rising since the beginning of the year moving from 0.25% to the current rate of 1.75% announced last month. The Bank of England base rate has not been this high since December 2008, with many homeowners never having experienced anything but low mortgage rates.

The Bank of England are due to meet this month and it’s expected that rates will be increased again by 0.25% to try to combat rising inflation. Many analysts are now forecasting mortgage rates to hit 4% by the end of the year and not fall below this benchmark until April 2024.

With over £100bn worth of mortgages expected to mature before the end of 2022 there will be increased pressure on lenders to keep up with the demand and support homeowners in securing the best deal.

Different mortgage rates

The lowest rated mortgage deals are not necessarily the best for everyone. Tracker or variable rate deals were popular when interest rates were high. They accounted for 7 out of 10 mortgages in 2009 and allowed homeowners to immediately benefit from the fluctuation in the interest rate. Following the financial crisis, interest rates plummeted and fixed rate mortgage deals became the favoured option.

Both are still widely available. Current offers for fixed rate deals seem to be pitched quite high for them to come down later. This makes tracker mortgages more appealing but they offer a higher degree of risk that monthly payments may increase.

According to Moneyfacts, as banks and building societies become inundated with mortgage applications the average deal is now on the market for just 17 days. With so much movement in the market and so many different deals on offer, independent and unbiased advice as to which mortgage deal is right for your circumstances is becoming more and more important.

Switching mortgage deals

In today’s marketplace, lenders are changing schemes available on a daily basis and rates have been on the increase. At Poole Townsend, we would recommend you start looking at your options six months before your current deal ends. With some lenders, we can reserve a product now with completion being once your current deal ends to avoid incurring any penalties. This timescale also gives you plenty of time to assess the current offers and make an informed choice.

We have access to a wide range of mortgage lenders, from the main high street banks and building societies to more bespoke providers lending to those with less equity in their properties for example. Our mortgage advisers can compare mortgages with short and long term options for fixed and variable deals, opportunities to change the term of your mortgage if required and advise on early repayment charges or fees for securing your deal.

Ultimately, your choice of mortgage deal comes down to how much flexibility you have within your monthly budget. Whether you’re a first time buyer or looking to remortgage, let our experts guide you through the maze and secure the type of mortgage that’s best for you.

Learn more about our mortgage service on our dedicated mortgage pages or contact our Mortgage Brokers to book your first appointment with us.

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