Mortgage market changes – what you can do about them

Several large lenders have withdrawn their deals from the market completely and other leading British banks and a long list of other lenders, have re-entered the mortgage market with interest rates of almost 6%, after halting new fixed-rate home loans.

The increase means rates on two-year fixed deals are at their highest level since December 2008, when rates were around 5.80%. Following the former Chancellor Kwasi Kwarteng’s announcement and the Bank of England lifting the base rate, banks were forced to temporarily withdraw mortgages for new customers because of the sharp rise in gilt yields, which they use to price fixed-rate mortgages.

Many banks are still waiting for markets to settle before returning with new home loans, while some have returned with higher rates. According to the Bank of England, more than two million borrowers with fixed-term products will need to re-mortgage between now and the end of 2024.

Are you on a fixed variable rate or is your mortgage dealing coming to an end?

If you are on the standard variable rate, you are likely to have seen some big increases in your monthly payments. We recommend you take action now and look for a new mortgage deal to try and protect yourself from further impacts.

If your mortgage deal is coming to an end in the next six months, now is a good time to find a new deal which you can look to transition into as your deal ends. It’s worth noting that all rates are secured on application to the new deal, not when the deal starts.

If your mortgage is impacted by these latest changes in the market, speak to your TaxAssist Accountant who can refer you to TaxAssist Financial Services, who have independent mortgages advisers with whole of market access, meaning they can select products from a comprehensive range of lenders. Alternatively you can contact TaxAssist Financial Services directly on 0800 978 8000 or email [email protected].

Date published 20 Oct 2022 | Last updated 2 Dec 2022

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.