There are now nearly 10,000 mortgage products on offer throughout the mortgage finance market. This is a substantial increase from the same time last year and gives a good indication that lenders are actively looking to assist clients with product choice. A number of new lenders have launched and a number are also in the pipeline awaiting authorisation.
The majority of clients visiting AToM are looking for a longer term fixed rate, although some are still happy to take a short term tracker rate and are confident that rates will not fluctuate too much in the coming months. There are some good products available with minimal set up costs that have no early redemption penalties at all. So if you wanted to switch products later on, to a fixed rate for example, this could be done (be aware that most lenders charge product fees on fixed rates). Some lenders even offer the ability to do both in the same mortgage offering. Lenders are innovative when it comes to attracting a certain type of business and clientele! But do remember that tracker rates can go up, as well as down and more recently, fixed rates have been creeping up.
With all new mortgages, a budget planner will be required. So make sure you know and can advise exactly how much you are spending on almost every aspect of your lifestyle. Especially make sure you know your monthly costs on food, household expenses, travel, pension and saving contributions and other likely costs such as hobbies, going to the gym, lottery direct debits and more. Every lender will review your ability to afford your new mortgage, and they make assumptions for coming years, so all direct debits and most entries on your bank statements or credit report will need to be advised. This is so the lender can make a viable stress test on future rate rises and ensure that you will still be able to afford your mortgage at that time. Yes, maybe there is a little guess work, but do make sure you disclose all monthly expenditure as the lender will normally want to review your bank statements and will see it all anyway!