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Is it time to review your mortgage?

Whether you are a first-time buyer getting a foot on the ladder or a veteran homeowner looking to remortgage, finding the most suitable mortgage can be a changeable and challenging task. After a turbulent year in the mortgage market, the importance of clear-headed advice has never been more apparent.

A bumpy year

The mortgage market has been shaken up in recent years by rising interest rates, which have made affording a mortgage tougher for many people. Following the turmoil of the government’s ‘mini budget’ last September, rates rose sharply; they have since fallen back to more normal levels. In difficult economic conditions, though, affordability remains stretched for many.

Indeed, research shows that more than half of homeowners think affordability is the biggest issue facing the property market in 20231. This is unsurprising given that more than 1.4 million households renewing a fixed mortgage in 2023 have faced the prospect of interest rate rises, official data show2.

New deals

So, what options do you have? If your fixed-term deal is ending, the first possibility is to do nothing and let your mortgage revert to the standard variable rate (SVR). This can buy you time in the hope that rates will fall before you fix.

However, the problem with this approach is that SVRs are usually significantly higher than rates for other deals and there is no guarantee that rates will fall soon. Speaking to an adviser and choosing another option based on your unique needs will generally lead to you ending up with a lower rate.

Variable or fix?

The next question then is: variable or fixed rate? If you remortgage onto a variable rate, for example a tracker, your interest (and repayments) can change throughout the term. Depending on what happens to interest rates across the whole economy, your personal rate could rise or fall.

If you value certainty then, choosing another fixed-rate deal could be preferable. It is likely that the rate will be (considerably) higher than you had previously been paying because the last decade has seen rates stay at historic lows. But fixing a rate means that you will be protected if rates rise again during your term and you know exactly how much you’ll need to repay each month. And what term would you fix for? Another big decision to make.

First time for everything

Those right at the start of their homebuying journey have broadly the same choices to make: would a fixed-rate deal or variable product better suit your needs? As a first-time buyer, you’ll also need to think about how much deposit you can afford to put down and over how many years you want to repay the loan.

It is a challenging market in which to be buying a first home. However, there are positive signs: the rate of house price increases has slowed in the past year, while the number of houses for sale is higher than at any point in the last 27 months3. Government schemes like shared ownership and the Lifetime ISA are available to lessen the burden and help you save towards the deposit.

The value of advice

Given the large and wide-reaching impacts of a home purchase, getting a mortgage is not something you should do alone. Getting a mortgage can seem like entering a financial maze. If you’re not familiar with the way the market operates, knowing where to start can be bewildering.

For more information to get you on your way, why not download our in-depth mortgage guide or watch our educational video for a quick overview of the key facts?

Download our mortgage guide (PDF)



Of course, we also understand that in these difficult times, many people are in need of more personalised financial advice. We can help you work out how much you can afford to borrow and recommend the most suitable mortgage for you. Get in touch today via the enquiry form below and a member of our friendly team will be in touch.

1The Mortgage Lender, 2023, 2ONS, 2023,3Propertymark, 2023

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. If you would like any advice or information on any of the areas highlighted in this video, please get in touch.

Mortgage enquiry

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