As we move into 2021, there should be greater options for mortgage seekers and home buyers.
The stamp duty holiday has ignited demand for homes and mortgages, but as things stand, this holiday is set to end in March. This will likely see the market settle down, and this will coincide with mortgage lenders providing more options for people looking to arrange a mortgage.
Eleanor Williams, from Moneyfacts said; “First-time buyers who may have been concerned that with record low savings rates and increasing house prices, their homeownership dreams may have had to be shelved, may have been pleased to note that we are now seeing some providers return products for those with 10% deposits.”
Aaron Strutt, a mortgage broker believes lenders are working more efficiently right now. He says this can be seen in the number of lenders who have returned to the market.
Competition impacts costs in the market
While the mortgage rates are not as appealing as they might have been, he believes the competition amongst lenders will help to lower costs.
He said; “If you are planning to purchase a property and have a 10% deposit the mortgage rates are not as cheap as they used to be, but they are getting better.”
Michelle Andrews, HSBC UK’s head of buying a home, said: “I am pleased and proud to announce that we will be re-introducing mortgages at up to 90% LTV (loan-to-value). These mortgages build on our significant support for brokers and mortgage customers throughout 2020 and will be available across the board – for home purchases, first-time buyers and to those re-mortgaging – all up to a maximum of 35 years.”
Ms Andrews continued by saying; “The new lockdown will undoubtedly present challenges, but the experience of overcoming numerous difficulties during the original lockdown, for example making more use of automated valuations, will be invaluable. We are all seeking a return to normal, although for many it will feel like we may not see that for a while. With us returning to the higher LTV space, hopefully that is a little bit of welcome normality.”
Can you find a better mortgage?
There has also been a recent study which suggests 80% of mortgage holders believe they can get a better deal by looking around the market. 20% of respondents were confident they are on the best deal.
Gerard Boon, founder and partner at Boon Brokers, said: “Switching a mortgage doesn’t have to be stressful, yet it is one of those things which people regularly put off. We will happily spend time shopping around to save a few pounds when we are buying a new washing machine, but we won’t refinance to the best mortgage product on the market which could save hundreds of pounds per month – tens of thousands over the lifetime of the product.”
Gerard Boon concluded by saying; “One of the very worst situations to be in is to have come out of a fixed term deal and ended up on a lender’s standard variable rate – the difference can be dramatic, yet so many people are in that situation.”