Tackling cost of living

Mar 25, 2022

This week it was reported in the press that the cost living rate of increase is currently at a 40 year high. We’re all feeling the pinch!

There are a few things you can do to keep those monthly outgoings at bay. In today’s article, we wanted to share a few ideas the AFS team had that you might want to consider when it comes to your mortgage.

At the time of writing this article, we have seen many large banks review their rates many times in the last few weeks alone. We’ve never known anything quite like it! Whilst rates are going up, certain types of products are impacted more than others.

2-year fixed rates have seen some of the largest increases over the last month. Traditionally, a two-year fixed rate should be a reasonable amount cheaper than its longer-term stablemates.  However, right now they are more or less the same rate, in some cases, identical. This makes the longer-term fixed rates more attractive as a simple side-by-side comparison. We have noticed a big uptake in five-year fixed rates because of this.

Switch your rate early?

A few lenders will allow you to switch your mortgage a few months before the end of your beneficiary period. This means if your current lender is offering a ‘rate-switch’ deal that is cheaper than your current rate. you may be able to switch and start saving right away! Not all lenders do this so you’re best off giving us a call to find out more.

How about a Variable rate mortgage?

There are two main types of variable rate mortgage. Trackers and Discounted rate mortgages. Trackers are traditionally offered by banks, these rates move in line with an external index such as the Bank of England base rate. Trackers are inherently more risky than fixed rates because they can go up and down outside of your control. Recently the rate has increased from 0.1% to 0.75% in a short window. Those on tracker mortgages would have seen their mortgage payment increase as a result. That’s not to say it’s a bad thing as these rates may be cheap to begin with. Over the last ten years, trackers would have almost always saved money over a fixed rate.

Discounted rates are traditionally offered by building societies. These rates offer an initial discount for a fixed period. The discount is off the society’s own standard variable rate.  As building societies lend their members money, they tend to be less impacted by global markets. We are seeing this now as discounted variable rates are particularly cheap at the moment. Again, not without its risks but right now, out of the gates, it’s going to be the cheapest mortgage.

Steven Morris – Advising Director

CeMAP CeRER

 

Steve loves a complex mortgage. Most recently he has used his technical geekery to work his way up through Which? Mortgage Advisers, progressing to Senior Adviser and then Onboarding Manager. There, he was responsible for hiring, training and managing new advisers.

He also ran the monthly new starter inductions and wrote and maintained the telephony advice standards of the company. Outside of work Steve can be found coaching and being run ragged by his local under 10’s rugby team, Bristol Harlequins RFC.

Meet the rest of the Advantage Team

Why a Local Mortgage Advisor Makes All the Difference for Your Bristol Home Journey

Congratulations! You've decided to take the exciting (and sometimes daunting) step of buying a home in Bristol or the surrounding area. Whether you're a first-time buyer eager to step onto the property ladder or a seasoned mover looking for your next dream home,...

Are mortgage rates in the UK going up or coming down 2024

I thought mortgage rates were coming down in 2024, what is happening?  Let’s get a misconception out of the way early about how mortgage rates have been changing… Mortgage rates available during January 2024 were cheaper than anything else we have seen since. For...

Homeownership Made (Slightly) Easier: The New £5k Deposit Mortgage

Surprise news for first-time buyers!  Accord Mortgages and Yorkshire Building Society have launched a brand new mortgage product that lets you step onto the property ladder with a deposit of just £5,000. That's right, you can finally ditch the housemate and snag your...

UK Mortgage Rollercoaster: Rates Tumble, Yet House Prices Remain a Challenge (April 6, 2024)

MARKET WATCH! UK Mortgage Rollercoaster: Rates Tumble, Yet House Prices Remain a Challenge (April 6, 2024) This week in UK mortgages has been a tale of two trends: good news for potential borrowers with falling rates, and lingering concerns for some facing a tough...

UK Mortgage Rates: A Quick Look at the Last Week (as of March 24th, 2024)

MARKET WATCH!  UK Mortgage Rates: A Quick Look at the Last Week (as of March 24th, 2024) This week in the UK mortgage market (as of March 24, 2024), we've seen a relative pause after several weeks of steady increases in interest rates. The Bank of England (BoE)...

Help! I’m a Birmingham Midshires Residential Mortgage Customer

Birmingham Midshires Exited Direct Mortgage Market in 2011: What Existing Customers Need to Know  Important information for Birmingham Midshires mortgage holders: As of October 1, 2011, Birmingham Midshires made a significant change – they stopped offering...

February 26th 2024 mortgage news

Halifax buck the trend In a surprising move, Halifax, the UK's biggest mortgage lender, has cut its mortgage rates, going against the recent trend of lenders raising theirs. This move is seen as an attempt by Halifax to gain market share in the competitive mortgage...

February 14th 2024 mortgage news

What's in the news? February 2024   The cost of moving and stamp duty is putting millions of homeowners off of potentially downsizing. Older homeowners are unable to move to smaller properties because of the financial burden that comes with a house move, and this...

Navigating the Financial Maze of Downsizing in Retirement: What are Bridging Loans?

Retirement often marks a period of transition, a time to embrace new experiences and simplify life. Many retirees consider downsizing their homes, seeking a smaller, more manageable living space that aligns with their changing needs and lifestyle. However, the...

Mortgage rates are falling in the UK as lenders battle for business in 2024

After a gruelling two years of rising interest rates, the UK mortgage market is now seeing a price war as lenders compete for business. This is good news for borrowers, who are now finally seeing rates fall. Halifax, one of the country's biggest mortgage lenders, has...

Celebrating more 5-star reviews than any other independent broker in Bristol!

Contact us today to find out why we've received over 400 hundred 5-star Google reviews

You have Successfully Subscribed!