Banks can help amid the mortgage chaos, says DAVID POSTINGS chief exec of UK Finance
There is a lot of interest in the mortgage market right now – it’s on the front pages and the subject of much political debate.
Rising mortgage rates are causing concern among mortgage holders and people who want to climb the housing ladder.
Cost-of-living pressures and higher rates, coupled with steep housing prices, are eroding affordability.
People take a good look at their finances and make decisions about what they can afford.
Most mortgages are fixed-rate — about 80 percent of home mortgages are fixed — so those borrowers won’t see an immediate change in their monthly payment if bank rates rise.
Support: UK Finance chief executive David Postings (pictured) says people are scrutinizing their finances and making decisions about what they can afford
About 800,000 of those will expire later this year and another 1.6 million in 2024.
For those looking for a new mortgage or a new mortgage, there is understandable frustration when lenders pause or withdraw products.
The reason they do this is to manage service levels as they deal with large volumes of applications and react to pricing factors beyond their control.
However, industry-level data shows that there is still good mortgage availability across all loan-to-value categories.
Rishi Sunak has highlighted how support is available for people who are worried about their mortgage. The Prime Minister is absolutely right.
Anyone with concerns should contact their lender as soon as possible. People often leave it too late, but it’s much better to do this before you miss a payment.
Contacting your lender to find out the available options won’t affect your credit score, but missing payments will.
There was also concern about late payments and repossessions with some alarming headlines.
But the number of households in arrears remains close to historic lows, telling us that the majority of homeowners are keeping track of their payments.
Even though seizures are increasing, they are also doing so from a very low base and the numbers are much lower than in previous years.
In the past year, lenders have helped nearly 200,000 borrowers unable to pay their mortgage in full by offering tailor-made deferrals.
This can be a period of redemption, a period of zero payments or a temporary switch to interest-only.
Lenders have teams of experienced and understanding advisors who develop a solution tailored to your individual circumstances.
We are in the midst of a very challenging economic environment, and more pain could be ahead. Lenders are ready to help.
David Postings is CEO of UK Finance