This month’s edition of Spread the Word is full of good news. Keep reading to find out why Martin Lewis encourages using a mortgage broker. Details about the ‘upbeat’ start to 2024 for the housing market. Learn which mortgage rates have seen the largest monthly fall since 2022 and how the average mortgage rates continue to fall.
mortgage NEWS & UPDATES
MARTIN LEWIS ENCOURAGES PEOPLE TO SPEAK TO A MORTGAGE BROKER
In a recent episode of The Martin Lewis Money Show Live, the money-saving guru took a deep dive into mortgages, renting, house prices and interest rates. He said, "𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗯𝗿𝗼𝗸𝗲𝗿𝘀 𝗸𝗻𝗼𝘄 𝘀𝘁𝘂𝗳𝗳 𝘄𝗲 𝗰𝗮𝗻'𝘁 𝗴𝗲𝘁, 𝘁𝗵𝗲𝘆 𝗵𝗮𝘃𝗲 𝗶𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 𝗮𝗯𝗼𝘂𝘁 𝗮𝗰𝗰𝗲𝗽𝘁𝗮𝗻𝗰𝗲 𝗰𝗿𝗶𝘁𝗲𝗿𝗶𝗮 𝘁𝗵𝗮𝘁'𝘀 𝗻𝗼𝘁 𝗮𝘃𝗮𝗶𝗹𝗮𝗯𝗹𝗲 𝘁𝗼 𝘁𝗵𝗲 𝗴𝗲𝗻𝗲𝗿𝗮𝗹 𝗽𝘂𝗯𝗹𝗶𝗰. 𝗜'𝗱 𝘁𝗿𝘆 𝘁𝗼 𝘂𝘀𝗲 𝗮 𝗺𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗯𝗿𝗼𝗸𝗲𝗿 𝗶𝗳 𝘆𝗼𝘂 𝗰𝗮𝗻, 𝗲𝘀𝗽𝗲𝗰𝗶𝗮𝗹𝗹𝘆 𝗶𝗳 𝘆𝗼𝘂 𝗵𝗮𝘃𝗲 𝗰𝗼𝗺𝗽𝗹𝗲𝘅 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼𝘀. 𝗧𝗵𝗲𝗿𝗲 𝗮𝗿𝗲 𝘀𝗼𝗺𝗲 𝗱𝗲𝗮𝗹𝘀 𝘁𝗵𝗮𝘁 𝗮𝗿𝗲 𝗼𝗻𝗹𝘆 𝗮𝘃𝗮𝗶𝗹𝗮𝗯𝗹𝗲 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗯𝗿𝗼𝗸𝗲𝗿𝘀, 𝗶𝗻𝗰𝗹𝘂𝗱𝗶𝗻𝗴 𝘀𝗼𝗺𝗲 𝗽𝗿𝗼𝗱𝘂𝗰𝘁 𝘁𝗿𝗮𝗻𝘀𝗳𝗲𝗿𝘀. 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗯𝗿𝗼𝗸𝗲𝗿𝘀, 𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝗹𝘆 𝗶𝗻 𝘁𝗵𝗶𝘀 𝗱𝗮𝘆 𝗮𝗻𝗱 𝗮𝗴𝗲 𝘄𝗵𝗲𝗿𝗲 𝗶𝘁'𝘀 𝗮𝗹𝗹 𝘃𝗲𝗿𝘆 𝗰𝗼𝗺𝗽𝗹𝗲𝘅, 𝗮𝗿𝗲 𝗽𝗿𝗼𝗯𝗮𝗯𝗹𝘆 𝘄𝗼𝗿𝘁𝗵 𝗱𝗼𝗶𝗻𝗴 𝘀𝗼."
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Two-year fixed mortgage rate sees largest monthly fall since 2022 – Moneyfacts
The average two-year fixed mortgage rate dropped by 0.37 per cent in February to 5.56 per cent, market data revealed.
The Moneyfacts UK Mortgage Trends Treasury Report showed this was the biggest monthly fall since December 2022. It was the sixth consecutive month where declines in the average two- and five-year fixed rates were recorded, with the five-year fix falling from 5.55 per cent to 5.18 per cent.
The average two-year fixed rate is currently 0.38 per cent higher than the five-year equivalent. This time last year, there was a 0.24 per cent differential between the two, with the average two-year fix standing at 5.44 per cent and the average five-year fix at 5.2 per cent.
According to the Moneyfacts data, there was little change in the average variable rates in February. The average for a standard variable rate (SVR) came to 8.17 per cent in February, slightly down from 8.18 per cent in January.
Compared to last year, this was significantly higher than the average SVR of 6.84 per cent. The average two-year tracker mortgage rate stayed the same month-on-month at 6.15 per cent, and was also notably higher than last year, when it was 4.39 per cent.
SOURCE Mortgage Solutions
Want Rate Reassurance?
Get ‘Rate Reassurance’ on your mortgage. Remortgaging, moving, or buying in the next 6 months? We’ve got you covered.
⬇️ If rates drop, we simply switch you.
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‘Upbeat’ start to 2024 for the housing market – Nationwide
The typical UK property cost £257,656 in January 2024, up 0.7 per cent from December (£257,443), according to Nationwide.
Prices are almost stable year-on-year, with the latest house price index from Nationwide noting that prices are down 0.2 per cent compared with a year ago, an improvement from December 2023 when prices were 1.8 per cent down year-on-year.
Nationwide also pointed to signs of easing in affordability pressures, with mortgage rates continuing to trend down. This follows a shift in view amongst investors around the future path of the Bank of England base rate, with investors becoming more optimistic that the bank will lower rates in the years ahead.
These shifts are important as this led to a decline in the longer-term interest rates (swap rates) that underpin mortgage pricing around the turn of the year.
SOURCE Mortgage Solutions
Average mortgage rates continue to fall despite swap changes – Rightmove
While one major lender has moved to increase mortgage rates, the overall trajectory for pricing is still a downward curve, according to a property portal
This week has seen a number of major players, including Nationwide, Family, and Virgin Money, all reduce their mortgage rates across various residential, buy-to-let and remortgage products. However, one high street lender, Santander, moved in the other direction and chose to hike up prices in response to rising swap rates.
Experts have noted that the move was hardly surprising given the current volatile market but that it is unlikely to cause a long-term domino effect of lenders pushing up their prices.
SOURCE Mortgage Solutions
Do you know about 50+ and Retirement Interest Only Mortgages? Read on to learn more…
50+ and Retirement Interest Only (RIO) mortgages help mature borrowers who want the security of a mortgage with no end date and who can keep up with the interest payments each month. Unlike other mortgages, you won't repay the loan until you move into long-term care or pass away.
Here are a few reasons why these mortgages could be an option for you or someone you know:
🏡 More likely to have something to pass on as inheritance
🏡 No problem of interest roll-up – which is when interest builds and builds - as it does with Equity Release Lifetime Mortgages
🏡 Providing you can continue to pay the interest, you'll avoid having to sell your home
🏡 Generally cheaper when compared to an interest roll-up Lifetime Mortgage
🏡 Peace of mind knowing your mortgage is in place for life, so no more shopping around
🏡 Keep more equity in your home for future planning
A few things to consider with 50+ and Retirement Interest Only Mortgages
🔺 You only pay interest each month, so the loan owed remains the same
🔺 Be aware that if the sale of the property in the future does not have enough equity to cover the outstanding loan, then it would need to be found from other means
🔺 The loan balance will not reduce each month as no capital is being paid back
There is a flexible range of options, and together we will help you source and secure a mortgage which suits your circumstances - now and in the future. Contact us to find out more and arrange a flexible appointment to discuss your options.
PROTECTION NEWS
Homeowners lack cover in event of illness: Royal London
Many people in the UK are underprepared to pay their monthly housing costs if they’re unable to work due to illness or disability.
This is according to findings from Royal London’s latest report, ‘Tackling the gender pension and wealth gap’,
Royal London’s research shows 8 in 10 homeowners paying a monthly mortgage do not have income protection in place, and two-thirds have no protection should they be diagnosed with a critical illness, risking their financial stability if they are unable to work because of a longer-term illness.
While the numbers who have safeguarded the family home if they die sooner than expected are more encouraging – two-thirds (63%) have life cover – the report says it is worrying that so many do not have a policy to replace their income if they are unable to work through illness or disability.
Statistically, men are around six times, and women 12 times more likely to be ill and unable to work than they are to die, making income protection an appropriate option.
Of course, homeowners aren’t the only ones with financial commitments who need to keep a roof over their head. Tenants also need to pay their rent and can be just as exposed without insurance in place, yet the statistics make for even more concerning reading. Less than a third (29%) of renters have life cover, and only 6% have income protection.
SOURCE Mortgage Strategy
