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Hi everybody,

We are sending out a short bulletin to keep you in the loop of what is actually going on with mortgage rates.  There is a lot of panic and noise in the media but we’re going to keep you up to speed with regular bulletins via email and on social media.

So, eh, what happened?

As most of you know the banks and lenders removed a lot of their mortgage products available to the public as they try to determine what the Bank of England will do about rates.  If the BOE had to raise rates to 4% to deal with the fallout from the Government’s mini-budget then the banks couldn’t really have a mortgage available at 3.9%.  So they pulled everything very quickly until they get a handle on what is going?

Will it stay this way?

No. Lenders are already planning to bring back products they withdrew, adjusting the rates where appropriate.  

So how much higher will rates be?  How much extra is it going to cost?

It depends on what interest rate the Lenders place on the products they bring back to the market. A prominent lender sent brokers their new pricing list and residential buying mortgages were 1.2% higher than they were a week ago.  An increase of around £80 - £90 per month for every £100k of a mortgage over 25 years compared to a week ago.

What should I do?
Don’t panic for a start but speaking to a broker (doesn’t have to be anyone on the Mortgage Propeller platform) and making a plan would be a good start.

If you want to get answers quickly and find out if you should be remortgaging or paying an Early Repayment Charge be sure to speak with a broker and have all your paperwork ready so they can get you the answers you need, quickly. Its not easy for mortgage brokers just now.

The Life of a Mortgage Broker (at the moment)

“Most of our time is spent trying to secure deals for our existing clients as quickly as possible – we know their requirements and have all the necessary paperwork. If the Lender indicates they’ll remove a product my client should have I may only have an hour to get them over the line – sometimes minutes as it was with Virgin Money yesterday.  

If you are looking to re-mortgage my advice would be to have all your paperwork ready for the first meeting with your broker. The mortgage market and rates are changing every few hours currently. If your broker has all your paperwork they can work as fast as possible to get that deal secured for you at short notice.

I’ve also had enquires from clients where their deal is coming up and they want to know the impacts if they come out of their deal early and possibly pay the early repayment charges. These enquiries can only be answered on an individual basis because it depends on costs and circumstances and risk appetite.”

- Laura Gorman, Senior Ops Director MortgageJoy

MortgageJoy is on the Mortgage Propeller platform and is offering a no fee, no obligation free advice service for those borrowers seeking advice through the Mortgage Propeller platform. They urge borrowers seeking answers to have their documentation uploaded in advance.

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