The end of September brought with it one of the most sudden turns in the property market in recent years, with mortgage prices rising and the range of available mortgage products reducing significantly, meaning that many people looking to remortgage or get on the property ladder need to change their strategy to find the best deal.
After the fiscal event on the 23rd September, the number of mortgage products reduced from nearly 4,000 to 2,371, and the average two-year fixed mortgage rate has risen to over six per cent.
This has occurred for a variety of factors, but there are steps that people in the market to remortgage and first-time buyers can do to avoid spiralling mortgage repayments.
The first step is to shop around, as several providers will still provide lower fixed rates, up to 1.5 percentage points lower in some cases, although given how quickly the situation has moved since September, seeking advice from a broker on when to strike is essential.
This is especially true for people with quite a bit of time left on their fixed-rate mortgage and wondering whether to cut their losses and accept a higher rate now in order to avoid a potentially much higher rate later.
The best advice if you have more than a year left on your deal is to wait and remain on your lower rate for as long as possible. However, what you can do is reserve a mortgage offer early, which will be valid for six months, and see which way the market is turning.
Theoretically, you can do this sooner, but since most fixed-rate mortgages have early repayment charges to consider, be careful not to undermine any savings through expensive repayment charges.
Instead, a potentially more prudent option is, providing you have the money to do so, overpay what you can (within the limits of your capability and the rules of your mortgage package), or put money into a savings account to help pay for higher bills down the line.
For advice about mortgages in Liverpool, get in touch today.