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MORTGAGES: What to expect in 2018

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9:04pm 31st January 2018
(Updated 12:09pm 1st February 2018)

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What’s going to happen to house prices and your mortgage over the next 12 months?

We’ve teamed up with KM Financial Solutions to give you some useful tips.

Here is their advice:

Annual UK house price growth, with some regional variations, is expected to be around 1% in 2018 and 3-4% over the long term according to Nationwide*.

The Bank of England Rate increased to 0.5% in November 2017. It was the first interest rate rise since July 2007. Although, there seems to be no panic, and the Bank of England regularly says that any rise would be measured, and increase slowly over time. However we do expect rates to increase over the coming years**.

Of course, you may be perfectly happy with your current situation and the deal that you’re on. However, for others, events such as a rate rise and further aspects of Brexit, rising inflation and overall economic conditions in the UK may be considered a wake-up call, which prompts the need to have a conversation with us.

If you are approaching the end of your mortgage deal period, and what to have a look through the current deals on offer.

You may simply want to change your existing mortgage arrangement, possibly to raise further funds. A house move may be on the cards, and you might be considering larger mortgage or you may be one of the 3-4 million*** currently on Standard Variable Rate. These are all good reasons and would be wise to talk to us.

A mortgage is probably the biggest debt you’ll ever take on, but by employing these little tricks you can pay it off ahead of schedule.

Most mortgages allows you to ‘Overpay’ by certain amount each year, without incurring any charge. Generally that’s about 10% of your mortgage balance. If you pay more than that, then you may incur an early repayment charge. If you can afford it, it’s well worth paying a little extra each month on your mortgage repayment as it can dramatically cut how long it takes you to pay off the mortgage.

There is another way to clear your mortgage early, without actually having to pay any extra each month, so long as you have a decent savings pot. The trick is to make use of an offset mortgage. These are fairly common. The idea is that you place your savings in a savings account which is linked to your mortgage account. Your savings are then ‘offset’ against your mortgage debt, reducing the amount on which you have to pay interest. Just bear in mind, you won’t earn any interest on your savings pot with an offset account, though with savings accounts so poor at the moment, you probably aren't missing out on much.

We have access to the whole of Market and may save you time and money to have a chat with us.

Warning—your home may be repossessed if you don’t keep up with repayment on your mortgage.

*source-Nationwide December 2017

**source-Bank of England, November 2017

***source-which, March 2017

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MONEY: Planning for the future in 2018

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