Mortgage Service

Find the best mortgage for your circumstances

With the recent increase in the base rate by the Bank of England mortgage rates are starting to rise

See whether you can save money on your mortgage using our independent service or you can call us on 0117 980 7743 (8.30am to 6pm – Monday to Friday)

Should You Remortgage In 2023?

A staggering £2.78 billion of interest is being paid by people on the wrong mortgage deal!

According to the latest research* 36% of UK homeowners are sitting on their lender’s Standard Variable Rate (SVR).

When you took out your mortgage, there was a good chance that you were given an initial fixed-term deal over 2,3 or 5 years. At the end of the initial fixed term, you will usually have been switched automatically to the lender’s Standard variable Rate (SVR) of interest.

If this is you, there is a good chance your monthly mortgage payments are much higher than they should be.

You are not alone. 4 million UK homeowners are in the same boat.

We pride ourselves on having strong relationships with lenders, many of whom will consider proposals on a case-by-case basis.

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Are you looking to save money on your existing mortgage or raise some additional money against your property? Re-mortgaging your home could be the perfect option.

It can often be cheaper to add an extension to your existing property rather than moving home, and a remortgage deal could give you extra cash to finance this.

If you are looking to move home, shopping around for the best mortgage deal available for your circumstances is important.

The best mortgage deals for home movers tend to go to people who can provide a high deposit. You can use personal savings and the equity from the sale of your current property to fund your deposit on your new home.

Mortgages for over 60s

Until recently, mortgage options for people aged over 60 were limited.

Over the last few years, there has been significant product innovation in lending products available for older clients and people borrowing into retirement including interest only mortgages.

Getting accepted for a mortgage

The rules around getting a mortgage have tightened up in recent years.

Lenders are obliged to ensure that you can afford to take on secured debt.

In assessing you, Lender criteria will vary, but some of the following will be covered off when you are assessed for a new mortgage:

• Is your income sufficient to cover your repayments each month?
• Have you ever missed a mortgage payment or other repayment in the past?
• Is your income stable and secure?
• Do you have significant outstanding debts waiting to be repaid?
• What is your previous credit record?

Depending on the mortgage lender, they may ask you to provide your address history, recent bank statements, payslips, accounts (if you are self-employed), and details of your existing financial commitments such as loan or credit card repayments.

Using our mortgage broker service we can help you find a lender aligned with your mortgage finance requirements.

3 main types of mortgage rate available:

1. Fixed rate mortgages

Fixed rate mortgages are set at the same rate for an agreed period of time – usually two to a five-year fixed rates. This can offer reassurance as you can be sure that your repayments will be the same each month for the length of the fixed rate agreement, allowing you to plan your budget going forward.

2. Tracker mortgages

A tracker mortgage, as the name suggests, ‘tracks’ an interest rate, usually the Bank of England Base rate, over a set period of time. The length of a tracker mortgage can range from two years to the life of the mortgage.

An interest rate will be set at the outset of the mortgage agreement, after which your monthly mortgage repayments will vary depending on the movement of the interest rate being tracked. While the Base Rate is low, tracker mortgages can be appealing, but they carry the risk of higher monthly repayments if interest rates go up.

 3. Offset mortgages

An offset mortgage allows you to link your current account or savings account to offset the cost of their repayments.

Instead of earning interest on your savings, the money is set against your mortgage. Therefore, you pay less interest on that debt.

If you have substantial savings or rely on an irregular income, an offset mortgage may be your best option.

How To Repay Your Mortgage

You can choose to repay your mortgage in two different ways:

Capital Repayment Mortgage

With this type of mortgage, your monthly payments pay off a proportion of the capital owed and the interest on the loan. At the end of the mortgage term, the loan will have been paid off in full.

Interest Only Mortgage

With this type of mortgage, you only pay off the interest every month, so monthly repayments are lower.

Lenders have criteria on who they lend to on an interest only basis – call us on 0117 980 7743 for more information if this option is of interest.

While some lenders will take house sale as a valid repayment strategy for the mortgage, most will require a valid repayment method to cover the capital repayment when the mortgage ends.

In the last 12 months lenders have loosened their criteria on interest only mortgages with a number of lenders providing more flexible lending options.

If you require help on your mortgage options use our impartial mortgage advice service or click here if you are 55+ looking for options for borrowing in retirement.

What Are The Fees I Can Expect To Pay On A Mortgage?

Buying a property can be an expensive exercise and it is important that you are aware of all the costs that come into play when buying your home.

The costs relating to your mortgage will be set out clearly by the lender in what is known as the “Keyfacts” document provided to you.

These costs may include:

• Arrangement Fee – Charged by the lender to cover the administration costs of processing your mortgage. This will vary from deal to deal. You normally have the option of adding this fee to your mortgage but this will increase your cost of borrowing over the mortgage term.

• Mortgage broker Fee – If you have used a mortgage broker to help arrange your mortgage for you then a fee may be charged which will be outlined in your keyfacts document.

• Mortgage Account Fee – Applied by the lender at outset when you first take out your mortgage to cover the set up and termination costs of your mortgage.

• Valuation Fee – Charged by the lender to value your property in assessing the value for mortgage purposes.

• Re-inspection fees – If a lender has required you to make agreed repairs to the property a re-inspection may be required

• Higher lending charge – If you are borrowing a high loan to value the lender may decide they wish to insure the possibility that you may need to sell your home and this results in a loss.

• Early redemption charges – If you pay off part or all of your mortgage earlier than expected the lender may charge you a fee – this will be covered in your keyfacts document.

• Mortgage exit fee – Paid to your lender when you repay your mortgage.

• Insurance costs – as part of your mortgage you may be encouraged to take out insurance either by a broker or the lender to cover buildings insurance and other optional insurance such as mortgage life insurance.

Top 10 Mortgage Tips For 2024

1. If you are unsure of your mortgage options, seek mortgage advice from a FCA regulated independent mortgage broker
2. Maximise the deposit you can put down on your property to benefit from the most competitive Mortgage interest deals.
3. Read the Lender Mortgage key facts document carefully to understand the costs being applied by the lender.
4. Ensure you are comfortable that mortgage repayments (whether repayment or interest only) fall within your budget.
5. Remember that mortgage discounts are temporary, and borrowing rates may increase when the discount period ends.
6. If you are remortgaging, ask your current lender what deal they can offer you, as well as shop around.
7. If your lender’s property valuation is too low, ask them to reconsider and provide supporting evidence from the sale price of other properties in your area.
8. For interest only mortgages ensure that you plan carefully how to pay off your mortgage and check at regular intervals that your repayment strategy is on track.
9. At the time of writing interest rates are at record lows. While borrowing is cheap now, this situation may change, so factor in a rise in interest rates into your budgeting calculations.
10. Consider mortgage unemployment insurance in the event that you lose your job. This may provide valuable breathing space in covering mortgage repayments while you look for a new job.

How much can I borrow on my mortgage?

It is very important that when considering a mortgage you work out how much you can afford.

While there is a greater onus on mortgage lenders to lend responsibly you will also need to consider what level of borrowing is appropriate for your circumstances.

In simple terms lenders will base how much you can borrow on a multiple of your income (joint income for couples). However there are a number of factors that will determine what you can borrow from a mortgage company.

Mortgage lenders are required to apply strict rules to what they can lend to you based on your personal circumstances. In assessing affordability lenders will not only look at your income but also your outgoings e.g. monthly household bills. Lenders will look at your bank statements typically over the last 3 months to determine whether you can afford the mortgage you are looking for.

Many mortgage deals have initial periods where preferential terms are offered and borrowing costs are lower than normal – when this discounted period ends make sure you can afford any reasonable increase that may kick in. In assessing affordability lenders will take into account your income and outgoings and your current employment history. In calculating disposable income your total income will be taken into account less other debts you may have and living expenses.

The lender considering your mortgage application will have their own method of assessing affordability but it makes sense to do your own budgeting calculations to ensure the monthly repayment requirement is well within your budget.

In calculating how much you can borrow the lender will apply a maximum amount you can borrow called the loan to value of the property (LTV). E.g. If you are a first time buyer the lender may stipulate a LTV of 95% which means they are prepared to lend up to 95% of the value of the property (this will be assessed by the mortgage company’s own appointed surveyor). In this scenario the first time buyer would be required to put down at least 5% deposit towards the property purchase. The mortgage rate deals offered by a lender will be affected by the level of deposit that can be put down.

Generally speaking the higher the deposit that can be put down the better the mortgage rate can be achieved.

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