The last week has been a volatile couple of weeks for the mortgage industry, over 3,000 mortgage products have been removed or changed. Lenders are starting to return to the market with new products but in some cases mortgage rates have gone from 1.5% to 4.5% or more. Lenders are also repricing products up to three times a week and some are beginning to extend their rate switch windows, so the landscape is forever changing.
Savills residential market update predicts that next year will be economically challenging with inflation peaking at 10% and the base rate is due to be 4%. There will also be a weak period of GDP growth next year however the positive is that there are low levels of unemployment. Spiking rates next year will challenge both new house buyers and existing owners. There will also be other factors in play next year including the end of the help-to-buy scheme, new sustainability targets for the construction industry and a continued increase in material, labour and land costs.
We have noticed that fixed rate products have been withdrawn the most, with lenders believing consumers will look to fix their mortgage before rates rise further.
“We may end up in a market where for a period of time trackers are prevalent for shorter terms, fixed rates are longer term and lenders are more flexible with product transfers. We may even see the return of capped rates so watch this space”
Chris Lees, Mortgage & Protection Director at Resolve Financial Solutions.
If you are concerned about your mortgage and would like to have a free, friendly, no obligation chat about your current situation and how you can plan for the future, please get in touch.
*Your home maybe repossessed if you do not keep up repayments on your mortgage.