Hundreds of residential mortgage deal offer in the U.K. have been pulled after market chaos sparked concerns about base rates rising as high as 6% next year.
Overall, 935 mortgage products were pulled from the market on Tuesday, according to data from money comparison site Moneyfacts. The company said this was the largest ever daily drop on record, with the previous high being 462 when the first U.K. Covid lockdown was announced in 2020.
There have also been reports of house sales falling through as lenders / banks backed out of previously agreed mortgage deals due to market uncertainty. Concerns about mortgage rates becoming unaffordable have spiked among borrowers and lenders. This instability then causes mortgages otherwise agreed to become more pronounced.
Research suggested that for households looking to re-finance, for example, a two-year fixed rate mortgage, payments could jump up by as much as £627 on average per month in South Wales and the UK as a whole.
This means that borrowers that previously could afford the mortgages may not now be able to depending on their other spending habits and funds/salaries.
Concerns have been raised about borrowers having fewer options when trying to find a mortgage deal due to the market chaos, which could drive prices up even further. However, this cannot last well into the future, and it is inevitable that the market will even out at some point. The biggest difficulty is not knowing when that is likely to happen.
If you have a variable- or tracker-rate mortgage, your interest rate may already have changed. If you have a fixed-rate mortgage, the interest you pay will remain the same until your deal ends.
Searching for the right mortgage deal can help you access a more competitive interest rate.
If your mortgage deal has come to an end, shopping around is essential – it could save you money now and over your full mortgage term. With interest rates being so high and continuing to climb, we can expect to see a dip in buyers looking to purchase properties due to a nationwide inflation crisis.
The best course of action for a potential buyer, is not to panic but to lock into a good deal via a South Wales based mortgage broker, they will have researched and scanned the available products as well as the best deals and advise based on trends and what they foresee is likely to happen.
Are you selling a house? Selling at a time of high-interest rates can be difficult as there are fewer buyers. If you want a fast house sale with a fixed and guaranteed price, then contact me today. I will make a fair and guaranteed cash offer for any house in South Wales today.