With the biggest cuts to mortgage rates in 16 months, whether you’re looking to buy or remortgage, the market has some great deals available for borrowers this autumn…
According to data from Moneyfacts, the mortgage market has seen the greatest decline in a single month since May 2020 and average rates for two and five-year fixed deals have fallen for the third month in a row*. Read on to find out how this could benefit you.
First-time buyers can benefit from the low deposit, low rate deals
The past six months have seen a steady return of low-deposit deals in the 90-95% loan-to-value (LTV) space, meaning buyers only need to scrape together a 5 or 10% deposit to make their dreams of homeownership a reality.
As lenders continue to compete with each other to attract first time buyers to the market, mortgage rates in this LTV bracket are being continuously slashed – meaning significant savings on your monthly repayments. With MANNERS & HARRISON seeing the average rate for a two-year fixed falling to 2.53%+ and five-year fixed deals cut to 2.95%+this is a great sign of things to come as up until now, rates were traditionally higher for borrowers with a low deposit to offset the risk to lenders.
More rates available under 1%
It’s not just first time buyers who are benefitting from rate reductions; existing homeowners may want to consider their remortgage options following an influx of sub-1% mortgage deals as the lender rate war intensifies.
Whilst rates below 1% are available for those buying a property, the lowest deals will be found within the 60-75% loan-to-value tiers, typically for those looking to remortgage with significant equity in their home. Some of the biggest high street lenders have joined the fray to offer the best rate in the market, including two-year fixes at 0.74%+ and 0.95%+ from TSB and NatWest respectively, and a five-year fix at 0.89%+ from TSB.
Things to consider
Although low rates can only be a good thing for your bank balance when it comes to making those monthly mortgage repayments, there are a number of things to consider when taking advantage of the deals on offer – namely, how do I compare the different products available to understand the true cost of the deal? How long will these rates be around for and what are the next steps to securing a deal?
1. First things first – whatever your circumstances, it is essential that customers nearing the end of their initial fixed-rate period take action and review their remortgage options to avoid overpaying on their lender’s Standard Variable Rate – (the rate you move on to once your fixed deal comes to an end). Research from Moneyfacts suggests that nearly half of homeowners surveyed remain on a lender’s Standard Variable Rate rather than moving onto a lenders mortgage rate – costing them an average of £3,528 more each year++. MANNERS & HARRISON can compare 100s of remortgage deals from a panel of lenders to help you switch to a better deal and benefit from some potential savings.
2. Secondly – these rates may not be around forever. There will come a point where these historic lows are no longer sustainable for the lenders. The availability of sub-1% deals, in particular, will be heavily influenced by the wider economy over the next few months. At the time of writing this article, the Bank of England’s Monetary Policy Committee is looking to increase its base rate from 0.1% as early as December, which in turn could have a knock-on effect on how lenders price their current mortgage deals.
3. And finally, attractive low rates aren’t the only thing to look for when searching for the ‘cheapest deal’ (contrary to what this article is saying). You need to look at the overall cost of the mortgage product, factoring in additional fees, lender criteria and the length of time (mortgage term) you wish to borrow for. In addition, although you may feel it prudent to lock in a low rate for longer and plump for a five-year fix over a two-year (especially as the rate gap has closed between these products over the course of the last few years), there are factors such as higher ‘early repayment charges’ associated with these products which you may not have considered. Our Mortgage Consultants can help you understand the bigger picture, explain these overall costs (including potential savings) and find the best deal for your individual circumstances.
To find out more about the current mortgage market or for a review of your mortgage and protection options, get in touch today on 01525 244 589.
** The rates quoted are valid at 09/11/2021 and are fixed until 2024 and 2027 retrospectively, followed by the lenders Standard Variable Rate for the remaining term of the mortgage. APRC charges apply. Maximum LTV of 95% and 60% retrospectively. Subject to Status and Lender Criteria. The rate may be withdrawn at any time and this email does not constitute an obligation for lenders to grant a loan. Lender fees may be applicable. Source details from Twenty7tec.
Couples who live together are often under the impression that they have the same legal rights upon death as couples who are married, unfortunately for them, this is a myth!
Unmarried couples who live together, whether it is for 30 days or 30 years, have no legal right to receive a share of their partner’s estate upon death and this is why making a Will is arguably even more important for couples who decide not to marry.
According to the Office of National Statistics, cohabiting couple families were the fastest growing family type between 1996 and 2020, and as such with more and more couples making the decision to cohabit rather than marry, the only way that they can ensure their estate passes to their loved one is to leave a Will.
If you die without leaving a Will, the Intestacy Rules shall apply to your estate. The Intestacy Rules make no provision for cohabiting couples and ultimately this shall mean that the partner which you live shall not receive anything from your estate. Depending on the family which you have at the time of your death, this could mean that your estate could pass to family members who you would not have chosen to receive any benefit from your estate.
The only exception to this is if you own any joint assets as beneficial joint tenants. Such assets shall pass automatically to your partner by survivorship. However, it is unlikely that all of your assets shall be owned in this way and as such, some of your assets may still pass to family members who you would not have wished to benefit from your estate.
As well as a cohabiting partner not receiving any benefit from your estate, they shall also have no right to deal with the administration of your estate. As well as determining who receives the benefit from an estate, the Intestacy Rules also determine who has the legal right to administer an estate where there is no Will. Instead, if you have made a Will you have full discretion to choose who you wish to administer your estate, and this could be your cohabiting partner if you choose.
In the event that you do not leave a Will and your partner is left with no provision under your estate, this could lead to them having to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975 in order for them to try and receive some provision from your estate. Although this does mean that there is an opportunity for your partner to attempt to receive some financial provision, this can be a highly litigious and expensive process and something which could be avoided by simply ensuring that a Will has been made outlining who you wish to benefit from your estate.
There are therefore numerous reasons why it is extremely important to consider making a Will when you are in a cohabiting relationship, the main incentive being to ensure that your partner receives the provision which you would want them to receive, rather than the Intestacy Rules dictating this for you.
If you require further advice in respect of making a Will please contact one of our Mortgage Consultants, who will be happy to start the process of setting up a Will, through MANNERS & HARRISON provider, Redstone Wills.
Aviva explores ways to take control of your mental wellbeing in times of uncertainty
Feeling stressed, overwhelmed, bored, lonely, sad, angry or tearful? Whether you’re feeling one, all or none of the above – you’re not alone.
It’s fair to say that most of us struggle to manage emotions when faced with uncertainty.
So, it’s vital to create good habits and practices at home that support your physical, mental and emotional wellbeing.
What can I do about my mental health right now?
Anxiety is contagious and stress levels can go up the more information you’re exposed to. It’s not uncommon to feel a spike of anxiety when watching the news or hearing troubling stories from loved ones.
There’s an onslaught of content out there and it can feel overwhelming at times to process it all. It’s important to be mindful of this right now and find ways of managing yourself around that.
Ideally, you should try to prevent mental health issues rather than cure them. However, focusing on the different aspects of your life and giving each of them a little bit of attention each day, will help support your wellbeing. For example:
1. Limit your daily exposure to the news and social media
Don’t listen to your best friend’s brother’s boss for your information. Instead, only use trusted sources and official channels. While social media websites are doing their best to stamp out fake news, it’s still out there.
It’s easy to get swept up in speculation and sensationalist stories, but it’ll only leave you with misinformation and potentially heightened anxiety levels.
2. Connect with your friends and family daily
Social distancing doesn’t mean social disconnection. Talk about how you’re feeling or have a boogie together, talk, share and celebrate your connectedness – there is plenty of free video calling apps to connect with your loved ones.
3. Focus on what’s right in front of you
The antidote to anxiety is being present. So, if you find yourself getting anxious, bring your attention back to where you are right now, this will help alleviate any worries about the future.
Breathing exercises and mindfulness practices such as meditation can support this. There are lots of free guided meditation apps that can help you get started if you’ve never done it before.
4. Create a daily plan
Certainty is settling for our nervous systems and it helps to create a sense of safety. A few questions you could ask yourself each morning are:
o What am I looking forward to today?
o What am I going to do to look after myself today?
o What can I do to look after someone else today?
o What exercise or movement-based practice can I do this morning/lunchtime/evening?
o Who am I going to call at lunch or this evening?
o What is ‘the thing’ that I never have time for?
Use your answers to create a plan for the day. Even if you don’t achieve everything, having a plan can help ease your mind.
5. Connect with others online
There are lots of free online courses being offered – from yoga to dance to laughter circles. People are getting incredibly creative with their skillset and very generous in sharing them.
6. Take time away from your housemates and family
Make sure you allocate time each day to spend alone. You can go for a walk or run, read, meditate or whatever makes you happy. Do things that are about you and disconnect you from those around you.
It’s natural to worry about yourself or your loved ones during uncertain times. When you notice yourself in a negative thought spiral, there are some things you can do to get out of it.
o Remind yourself that just because you’re thinking a thought doesn’t make it true
o Focus on what you can control rather than what you can’t
o Acknowledge your thoughts and feelings, then spend time noticing and naming things around you like what you can smell, feel and see – you should notice yourself calming down
7. How can I tell if someone I know is struggling with their mental health?
Mental health issues usually begin with subtle changes in someone’s feelings, thinking and behaviour that then become an ongoing or a bigger issue.
A useful gauge of whether someone might be struggling with their mental health is to consider how they’ve changed. If you’ve known them for a while, you’ll know their usual habits, behaviours or moods. Some common changes include:
o Drinking too much – or more than usual – or started using other substances
o Having emotional outbursts or displaying erratic behaviour
o Suddenly losing weight or having a change in appetite
o Being quieter or more withdrawn than usual
o Criticising or blaming themselves for everything
o Looking tired all the time and saying they’re not sleeping well
o Turning up for work late or leaving early often
o Becoming unreliable, missing deadlines or disappearing for long periods
o Being secretive about their whereabouts and feelings
If a family member, colleague or friend is showing any of the above signs – don’t jump to conclusions. Check-in with them.
Ask them if they’re okay and remind them that you’ll listen if they need to speak to someone. If you don’t feel able to do that – ask someone closer to them to speak to them instead.
People usually feel safer sharing if they think you understand their perspective. So, if you or someone you know have struggled with mental health issues, consider sharing this if you feel safe doing so.
How Aviva DigiCare+ can help you
The Aviva DigiCare+ smartphone app is available to eligible advised individual protection customers. Powered by Square Health, the app offers a range of tools and resources, provided by carefully selected third parties.
Access a range of health & wellbeing benefits+ such as:
• Health & lifestyle (Annual health check*, Nutrition* and Gym discounts1)
• Treatment (Bupa Anytime HealthLine2, Mental Health, Second medical opinion, Physiotherapy3 (with income protection+), Digital GP (optional paid-for service)
• Bereavement (Bereavement counselling, Fast-tracked funeral payments, Bereavement guide)
Aviva DigiCare+ is a non-contractual service that Aviva can withdraw at any time. For full details speak to your mortgage consultant.