🏠 Five Reasons Why Mortgages Are Causing Concern 🏠
Updated: Jun 19
📢 Mortgage321 News Bulletin 📢 11/06/2023
The conversation surrounding mortgage rates is no longer limited to social gatherings or golf courses. It has become a topic of concern among homeowners and tenants alike. Here are five key reasons behind the current commotion:
1️⃣ Rising Cost of Living: Forecasts initially predicted a slowdown in price rises, but recent data suggesting higher inflation for a longer duration has unnerved lenders. To combat inflation, the Bank of England is expected to raise interest rates, prompting lenders to increase mortgage rates.
2️⃣ The 2021 Stamp Duty Frenzy: Two years ago, property buyers rushed to take advantage of tax concessions, creating a hot housing market. Now, as fixed mortgage deals from that period come to an end, homeowners face significantly higher rates for new deals, potentially adding hundreds of pounds to their monthly mortgage payments.
3️⃣ Last-Minute Deal Withdrawals: Lenders are abruptly withdrawing mortgage products, causing a frantic situation for borrowers. These sudden changes create stress and make it challenging for borrowers to react effectively.
4️⃣ The 'Do Nothing' Option: Homeowners who choose to wait and see, instead of securing a new deal, may face higher rates. Reverting to their lender's standard variable rate (SVR) can result in a substantial increase in monthly mortgage bills. It's crucial to choose a lender that offers fair rates at the end of a fixed term.
5️⃣ Addiction to Low Rates: With interest rates at historic lows for an extended period, many homeowners have become accustomed to favorable borrowing conditions. The recent rise in mortgage rates has caught some off guard, prompting them to question their financial decisions.
These factors not only affect homeowners but also impact tenants. Landlords facing higher costs may raise rental prices, further exacerbating the limited availability of rental properties.
At Mortgage321, we understand the challenges faced by homeowners in this evolving market. Contact us today to explore your options and secure a mortgage deal that suits your needs.
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