Mortgage Blog

Our mortgage blog combines contractor-specific updates on the mortgage, finance and housing industries with our unique opinion, based on 16 years serving self-employed workers.

The rush to remortgage as interest rates almost treble

Posted by John Yerou on June 16th, 2022 in Blogs, Mortgage Blog

On Friday 4th June, 2021, I reported Halifax’s remortgage rates around the 1% mark. A year on, mortgage interest rates look very different. The average two-year fixed rate is now almost three times more expensive than it was then.

Inflation, and the rising Base Rate to combat it, continue to climb. Here’s what you can do to lock in a rate to see you through these turbulent times.

Rising mortgage interest rates: what’s the story?

graph arrow risingThe Bank of England’s Monitory Policy Committee met on 4th May and raised the Base Rate again. They voted by a majority of 6-3 to increase Bank Rate by 0.25 percentage points, to 1%.

Those members in the minority weren’t against raising the base rate. Rather, they’d have preferred to increase it by 0.5 percentage points, to 1.25%!

At the subsequent meeting on June 15th, those in the minority got their wish. From June 16th (today) the Base Rate stands at 1.25%.

This has fuelled the expectation that rates will continue to rise throughout the year. It’s worrying, because lenders have already almost trebled their interest rates in a year.
Continue reading about  The rush to remortgage as interest rates almost treble

Ideal Buy-to-Let Contractor Investment Window Open (For Now)

Posted by John Yerou on February 25th, 2022 in Blogs, Mortgage Blog

rental homesFor years, investing in property has benefited contractors looking to squirrel away their profits.

That same Buy-to-Let market is flourishing despite (or because of) rising interest rates and inflation.

Today, we take a quick dive into the figures that back up the trend. Moreover, what they might mean for rental income over the next couple of years.

We also gauge reaction from the industry, and how that bodes for the buoyant, bustling buy-to-let investment opportunity.

Table of contents

Continue reading about  Ideal Buy-to-Let Contractor Investment Window Open (For Now)

Mortgage Strategy Awards Nomination: Best Specialist Broker/Distributor

Posted by John Yerou on January 14th, 2022 in Blogs, Mortgage Blog

7th April, 2022:
update to our previous longlist announcement

Freelancer Financials makes the shortlist for Mortgage Strategy’s “Best Specialist Broker/Distributor” 2022

I’d like to thank everyone who took the time out to vote for us for this most prestigious accolade. You’ve made us so very proud.

mortgage strategy awards hsbc 2022Enough of you voted for us to enable us to make the shortlist.

On the back of that, we’ve had an interview with the Mortgage Strategy panel.

And, when they announced the longlist results earlier this week, we were overjoyed to see our name on the shortlist!

We’re not counting any chickens yet. We’re up against five other specialist brokers of varying sizes and who serve various markets.

The winner will be announced on the 25th of May during the Mortgage Strategy awards ceremony at London’s Grosvenor House hotel. We’ll let you know how we get on but, until then, many thanks again. We couldn’t have progressed this far without your support. #Legends!
Continue reading about  Mortgage Strategy Awards Nomination: Best Specialist Broker/Distributor

Using Umbrella Payslips to Get a Worthwhile Mortgage

Posted by John Yerou on December 3rd, 2021 in Blogs, Mortgage Blog

There was a time when contractors chose Limited Company payment structures over umbrella companies. That’s because, working through a PSC, contractors retained more of their income than through an umbrella.

gaming chips on tableEven after paying an accountant, PSCs still made — and continue to make — financial sense. That is: from an income retention perspective.

And, yes: the difference in income persuades many contractors to overlook the risk of IR35‘s wrath.

Behind the scenes, we’ve also worked with many lenders to help them understand Limited Company day-rate contract income. So much so that our clients expect their application to breeze through the appraisal process.

Now, with another helpful nudge, many lenders are considering umbrella payslips, too.

So, up to a point: all good in the ‘hood.

But, in our article today, I focus on the unforeseen struggles contractors who switch to an umbrella company face with mortgage lenders. It’s an addendum to our recent post on ContractorUK, Why your umbrella payslip influences your mortgage application.

As ever, enjoy, comment, feedback to us. We’re only too happy to help:
Continue reading about  Using Umbrella Payslips to Get a Worthwhile Mortgage

Sub-1% mortgages gone in a week, despite unchanged base rate

Posted by John Yerou on November 8th, 2021 in Blogs, Mortgage Blog

house arrow price risingEven before the Chancellor dropped the mic on last month’s budget, mortgage lenders were putting up prices.

The rises began, in part, thanks to the Governor of the Bank of England.

He stated that the central bank “[would] have to act” in the face of rising inflation.

Lo and behold, we have that scenario: inflation hovering around 3%.

However, he chose not to raise the base rate when he had the chance, last week.

This has left many commentators exasperated, but it might at least slow the rise in mortgage interest rates…
might. No promises.

Continue reading about  Sub-1% mortgages gone in a week, despite unchanged base rate

Autumn Budget 2021: What it Means for Bricks and Mortar

Posted by John Yerou on October 29th, 2021 in Mortgage Blog

House And Percent Sign Balanced on SeesawAmid much talk of ‘levelling up’ the economy, Wednesday’s Autumn budget offered little news for the mortgage and property market.

However, there were a few ‘red flags’ posted, which we need to look out for.

Some may take effect right away, others in the months to come.

We know that the Stamp Duty holiday only ended in England last month. Plus, the introduction of the Mortgage Guarantee in April’s budget is already in full swing. To that end, very few measures announced by Rishi Sunak this week affect the Bricks and Mortar industries.

Few measures will have a major direct impact on the housing market in the way that Stamp Duty relief did.

So, it’s perhaps understandable that there’s limited government help at this time. Rather, it seems they’re content to allow the property market time to reset in its wake.
Continue reading about  Autumn Budget 2021: What it Means for Bricks and Mortar

Accord, Metro Bank and Natwest keep smashing interest rates

Posted by John Yerou on October 1st, 2021 in Mortgage Blog

percentage sign pointing downwardsThe trend of lenders cutting interest rates continued well into the second half of September.

Several rates for lower-deposit mortgages, which had been over 2%, dipped below that threshold.

Neither were the cuts restricted to mortgage types.

Lenders took chunks off standard residential and new build mortgages to maintain property market momentum.

Here’s a sampling of some of the new mortgage deals on offer*
Continue reading about  Accord, Metro Bank and Natwest keep smashing interest rates

2- and 5-Year Fixed Remortgage Rates from Halifax

Posted by John Yerou on June 4th, 2021 in Mortgage Blog

halifax logoAs of today, Friday 4th June, Halifax has introduced a range of remortgage deals on 2- and 5-year fixed rate mortgage loans.

Higher deposits, >=25%, come as either repayment or interest only.

For any lower deposits, down to 15%, the lender is offering repayment mortgages only. Details as follows:

Continue reading about  2- and 5-Year Fixed Remortgage Rates from Halifax

Government eases 5% deposit mortgages back into market

Posted by John Yerou on May 28th, 2021 in Mortgage Blog

Undoubtedly, the mortgage and construction markets need first-time buyers. In turn, first time buyers need 5% deposit mortgages. In this symbiotic relationship, the success of one promotes the longevity of the other.

But, during the pandemic, 5% deposit deals—first-time buyers’ go-to mortgage—disappeared from the High Street. Economics were simply too precarious for lenders to back high loan-to-value deals.

So, what were would-be homeowners with low deposits to do if they wanted a mortgage?

Continue reading about  Government eases 5% deposit mortgages back into market

10% Deposit Mortgages in a Post-Lockdown World

Posted by John Yerou on December 8th, 2020 in Mortgage Blog

Since exiting lockdown (December 2020), several lenders have now relaunched 10% deposit mortgages. Many, including several contractor-friendly lenders, are hoping to tempt low-deposit buyers before the Stamp Duty holiday ends.

But buyers shouldn’t get complacent. The current processing time of mortgages is double the norm.

The upshot? There’s only a small window remaining to make the most of SDLT‘s reduced rate. Today, we consider:

  • the recent history of low deposit lending,
  • the immediate future of high LTV,
  • the relationship between low deposits and lender ‘risk’ assessment, and
  • what you can do to avoid the worst of new, higher interest rates.

Continue reading about  10% Deposit Mortgages in a Post-Lockdown World

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