Author: Charlie

In July, both two and five-year fixed-rate deals dropped by 0.02% for the first time since May. Although the forecast for further changes is uncertain, the initial drop in rates is
promising and could lead to a more favourable environment for prospective buyers if rates
continue to fall in 2023.

How does this impact me? 

Despite a small fall in rates, it’s a promising sign for the future with further rates potentially falling. With reduced borrowing costs, the barriers to homeownership diminish, allowing aspiring buyers to afford a home loan and lock in lower monthly mortgage payments. Falling rates can also be advantageous for existing homeowners looking to upgrade to a more desirable property. Current homeowners are able to sell their homes more easily, as potential buyers look to enter the market with affordable financing.

The main benefit of lower rates is the opportunity to refinance existing mortgages. If you’re on a fixed-rate mortgage, you may choose to refinance your loan and secure a cheaper rate to reduce monthly payments or shorten the term. Despite the current rates falling by only a small amount, the results can be significant with an increase to long-term savings and financial flexibility. However, it is important to speak with your adviser before making any decision, as it may be that to exit your current fixed rate product incurs Early Repayment Charges (ERCs) which would make switching not worth it.

Approach with caution 

Being cautious around interest rates, even if they come down further, is crucial. If interest rates are on a downward trend they can shoot back up again without warning, especially during a period of economic instability. Homeowners could continue to face higher monthly repayments until we see a significant decline in interest rates, continuing to limit the ability to save or invest in other areas.

Fluctuations in rates could lead to uncertainty for. both current and potential mortgage holders. To navigate the complexities of the mortgage market, you should remain cautious, seeking professional financial advice. A thorough understanding of how the interest rates impact mortgages will allow you to make informed decisions during changing economic conditions.

For more information, contact your adviser who can support you and discuss the options available to you.

If you’d like to discuss the options available to you, contact us today.

A 100% mortgage, also known as a zero-deposit mortgage, is a loan that allows first-time buyers to borrow the full purchase price of a property without having a deposit.

What does this mean?

For first-time buyers, a 100% mortgage can be an appealing option as it allows you to step onto the property ladder sooner, without having to build up a large deposit. It can help individuals or couples who may be struggling to save a sizeable amount for a down payment, while also covering other expenses linked with buying a home, such as legal fees and moving costs.

What about my finance?
With a 100% mortgage, first time buyers could face higher interest rates compared to mortgages with a deposit. Lenders view these loans as higher risk as there is no initial equity, and as a result, they may charge a higher interest rate to balance this risk.

Furthermore, as a first time buyer, it is important to consider the long-term affordability of a 100% mortgage. Without a deposit, the loan amount will be larger, resulting in higher monthly repayments. It is essential to carefully assess your personal finances, taking into account ongoing mortgage payments, other living expenses, and potential interest rate changes.

Government-backed schemes
In recent years, some initiatives and government-backed schemes, such as Help to Buy, have been introduced to support first-time buyers. These programs aim to assist buyers by providing equity loans or shared ownership options, reducing the burden of a large deposit or enabling buyers to purchase a portion of the property.

Help to Buy closed to new applicants towards the end of 2022, although there could be a chance of it making a return with Wales extending the scheme to 2025. It is uncertain if the Help to Buy scheme will return, but there are still plenty of options available to first time buyers. It is essential for prospective buyers to carefully consider the long-term financial implications, including higher interest rates and monthly repayments, before opting for this type of mortgage. Exploring other government schemes and saving for a deposit may still be a wise approach to secure the best financial outcome when purchasing a home. 

For more information, contact your adviser who can support you and discuss the options available to you.

If you’d like to discuss the options available to you, contact us today.

Life is unpredictable, but preparing for the unexpected can provide peace of mind and
financial security for you and your loved ones. Whether you are considering life cover or re-evaluating your finances, it’s always important to plan for the future.

Cost-of-living pressure With inflation remaining high, and continuing to affect household budgets, dealing with price rises could be difficult especially for those on fixed incomes. While not all types of insurance are indispensable, it’s important to think carefully and consider your future financial security.

Why is life insurance important?
If you were to have no life insurance in place what position could this leave your family in, should the unthinkable happen? It’s more important than ever to have protection. The policy pay out can cover expenses such as funeral costs, outstanding debts and can provide ongoing financial support for dependants, after the loss of a primary income earner.  

Always plan for the future
Planning for the future goes beyond life cover. It requires long-term goals and taking the right steps to achieve them. By taking steps to prepare for the unexpected you can provide financial security for you and your loved ones, giving peace of mind knowing those closest to you will be taken care of if you’re not there to provide for them. Although it may be challenging to afford insurance, with the uncertainties of life, it’s always important to plan ahead and provide a safety net. It’s essential to act now, if you are able to, as you could face higher premiums when starting a life policy at a later date. Advisers are there to provide guidance on the most suitable protection plans for you. Updating your life cover to reflect changes in circumstances will also give you the most appropriate level of cover. For more information, contact your adviser who can support you and discuss the options available to you.

If you’d like to discuss the options available to you, contact us today.