The global uncertainty caused by the ongoing conflict in the Middle East and Ukraine has sent lenders into a spin, as inflation in the UK is likely to rise.
As a result, the UK mortgage market is experiencing a period of high volatility, which is causing rates to rise across a number of mortgage products.
Contractors can often find it more challenging to obtain and renew mortgages in comparison to workers who are directly employed by a company, so it is important to stay on top of these challenging times.
What’s happening right now
At the moment, mortgage rates are rising quickly, with average fixed rates now above 5.5 per cent at the time of publication.
Many lenders are frequently repricing or withdrawing deals given to borrowers, which is making it harder to secure a rate and manage affordability if you are buying a new home or remortgaging.
So far, more than 1,000–1,500 mortgage products have disappeared from the market and some of the best deals now only last a few days due to rapid changes.
The Bank of England base rate is currently 3.75 per cent, but expectations of it falling later in the year have changed as global events are expected to lead to inflation, in a large part due to higher energy and fuel costs.
What this means for you
Unfortunately, borrowing costs have increased noticeably in a short space of time, with first-time buyers and those with a small deposit being affected the most.
Lenders are tightening their affordability criteria and restricting products to certain groups. This is exacerbated by repayment costs rising alongside wider cost-of-living increases due to inflation.
The dilemma, do you fix now or wait for a better rate in the near future? At the moment, it is hard to predict what direction the mortgage market will take, so it is best to seek professional advice from a broker who specialises in products designed for contractors if you are concerned.
Specialised mortgages for contractors
We understand that many of our clients will need advice on the subject of contractor mortgages and we can recommend you to a quality firm providing professional mortgage advice that you can trust and who will work hard to find the best solution for you, whatever your particular requirements.
We have developed a close relationship with Windfall Finance so that you can draw on their experience and expertise to meet all of your mortgage needs.
Please contact Jeremy – jeremy@cogentaccountants.co.uk – for further details. You may receive preferential rates from Windfall Finance if you are a client of Cogent.
Your home may be repossessed if you do not keep up with repayments on your mortgage.
Financial advice given by Windfall Finance is regulated and authorised by the Financial Conduct Authority.