What's the current state of the mortgage market? Our expert partners at Trinity Financial explain why now's the time for borrowers to buy!
Here at Nested we’ve worked hard to connect with the best and most trusted partners in the industry and are delighted to be partnered with Trinity Financial! Trinity provides invaluable mortgage advice tailored to your needs, helping you secure your next move.
It’s been an interesting 12 months for the property and mortgage market. With lockdowns, legislative changes and Brexit it’s difficult to know who to trust, here’s Trinity’s take on the current state of the mortgage market.
Lenders targeting first-time buyers with more low deposit mortgages
Banks and building societies are planning to provide more mortgages to first-time buyers as they look to tap into the pent up demand from borrowers with smaller deposits.
The government’s mortgage guarantee scheme has been running for two months, and it has already pushed the lenders into offering five and ten per cent deposit rates again. The property market frenzy was in part fired up by the stamp duty cut, lenders will need to offer better low deposit mortgages to attract borrowers.
It is safe to say Boris Johnson will want to ensure the property market stays active with it playing such a major part in the economy. Although he needs to do it in a sensible way to avoid another boom and bust scenario.
Has there been a better time to get a mortgage?
There has rarely been a better time for borrowers with larger deposits and good incomes to get a mortgage. At the moment Trinity’s brokers have access to five lenders offering sub-1% rates to borrowers with a 40% deposit and five-year fixes priced around 1.3%. Over the last few months our brokers have arranged some of the cheapest ever fixed rate mortgages!
Virtually all of the top lenders provide interest-only mortgages again so they can minimise their payments and more lenders offering longer terms.
Are the lenders offering income stretch mortgages?
Nationwide for Intermediaries offers one of the most generous income stretch mortgages and provides 5.5 times salary mortgages to employed first-time buyers earning over £31,000 or £50,000 jointly. There are also more generous mortgages available to professionals like doctors and dentists because of their future earning potential, plus income stretch mortgages through other big banks providing you earn £75,000 or £100,000 each year.
Should you take a five per cent deposit mortgage?
If you plan to purchase a property and want a five per cent deposit mortgage, it is worth researching the market to make sure you are getting the most competitively priced deal.
More lenders are charging a premium for 5% deposit mortgages, and it is going to take a few months for them to really start to reduce in price. If you can raise a ten per cent deposit, you will get access to a much wider range of shorter-term and cheaper rates.
HSBC for Intermediaries offers the cheapest 10% deposit with a two-year fixed rate at 2.79%, while Platform for Intermediaries has a 3.55% two-year fix for those with a 5% deposit.
There is also a much wider choice of joint borrower sole proprietor mortgages and support products designed for parents to help guarantee their kids on the property ladder.
How do the lenders work out how much I can borrow for a mortgage?
Mortgage lenders use various figures to feed their affordability calculators to work out how much you can borrow. While some lenders provide 4.5 times single or joint income multiples, it is possible to borrow five or even 5.5 times or even six times salary.
If you have credit cards or loans, childcare costs or cars on finance, the monthly repayments may reduce the maximum loan, depending on the lender you approach.
If you’d like an honest, no-obligation conversation about your mortgage options then please give Nested a call on 020 3808 8531 or email email@example.com and we’ll connect you to Trinity!