Mortgage Advisors
August 2024
Newsletter
Summer is officially here and we have a new Labour Government. Our economy seems to have settled over the last couple of months and it all looks a lot more positive
In this months update, we'll be giving a overview of the UK mortgage market.
We'll also be covering when you are committed to your mortgage offer and when you should apply.
Latest News
The start of August is feeling very positive, this is traditionally a quiet month for the property market. This August it feels as though the economy is positioning us for a much more active end to the year. I have covered the main economic updates below.
​
Inflation Holds Steady
The good news is that inflation has remained stable at 2%. This is a positive sign for the economy and may influence future interest rate decisions. This may change, but for the moment, this stability can offer some reassurance for homeowners and those looking to purchase.
Base Rate Reduction
In a welcome move, the Bank of England has decided to lower the base rate from 5.25% to 5%. This is the first reduction since the rate began to climb in December 2021. While this is positive news, it's important to remember that mortgage rates are influenced by various factors, including the base rate, lender's profit margins, and market conditions.
Lenders Begin to Respond
With markets predicting the Base Rate reduction many lenders have been gradually reducing their interest rates for the past couple of weeks. This is a positive trend and could lead to further decreases in the coming months. However, it’s essential to remember that the mortgage market is competitive, and not all lenders will pass on the full benefit of the base rate cut to borrowers.
What Does This Mean for You?
These recent developments could present opportunities for both existing homeowners and those looking to purchase. If you're within 6-months of the end of your current rate, now might be a good time to explore your options. Similarly, if you're a first-time buyer, reduced mortgage rates could make homeownership a bit more comfortable.
Mortgage Rates Today
When am I fully committed to a mortgage offer?
​
It's important to understand that you're not locked into a mortgage offer until your solicitor requests the funds. Mortgage offers on average are valid for 6-months.
Interest rates fluctuate by the day and so you might find a better deal before completion, and if you do, you have the right to switch deals or even apply for a completely different mortgage.
It's crucial to remember that once you've exchanged contracts on a property purchase you should not change your mortgage offer.
Because of this flexibility we always recommend applying for your mortgage at your first opportunity, this will be as soon as you have your offer accepted on a property if you re purchasing or 6-months before your existing deal ends for a remortgage.
This flexibility allows you to shop around for the best rates and terms without the pressure of an imminent deadline.
This approach means that you will have the ability to secure the most favourable mortgage deal during your homebuying or remortgage process.
Jen Boulter