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mortgage newsletter - Autumn 2021

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01525 244 589

>> mortgage rates at a historic low

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.

more rates available under 1.5%

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-1.5% mortgage deals as the lender rate war intensifies.

Whilst rates below 1.5% 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. So why wait, now is the time to review your remortgage options.

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++. JONES & CHAPMAN can compare 1000s 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 fixed-rate (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.




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>> cohabiting couples – the importance of making wills

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 means that the partner who you live with 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 JONES & CHAPMAN provider, Redstone Wills.

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