The changing landscape of mortgages in 2023
The world of mortgages is more or less always in flux, as is well observed by both lenders and borrowers. It is useful for both, in fact, to make sure that they are fully aware of what is going on at any particular time, and it’s definitely something that we should all try to keep clued up on. As it happens, mortgages do inhabit a changing landscape, and the better an awareness there is of those changes, the better it will be for all.
Here are some of the main things that most people should try to be aware of in 2023. As you will soon see, mortgages are very much in a state of flux right now as ever.
Interest & mortgage rates
One of the main questions that people always have about mortgages is whether or not they are going to increase or decrease in terms of rates. If you are wondering about this in 2023, the truth is that there is likely to be an uncertain time ahead, especially here in the UK. Part of the reason for this of course is the rising interest rates from the Bank of England, which were up as high as 5% in June and could rise further still. Because of that, mortgage rates are up and up as well.
In fact, in many respects, this is one of the priciest times to have a mortgage, and that is something that borrowers are obviously going to have to be aware of. The average two-year mortgage is now at 7%, the highest since the financial crash of 2008. Clearly, there have been better times to take out a mortgage – but that is not to say it is necessarily not a doable time to do it right now still.
Will mortgage rates decrease soon?
If you are wondering whether mortgage rates are going to go down in the coming year, then you are not alone. A lot of people, on both sides of the equation, are wondering about this, and the truth is that it is never certain whether or not this will happen. The matter is all to do with interest rates, which will need to first be brought down if the mortgage rates are to decrease too. So it becomes a question of when interest rates themselves are actually likely to decrease, if at all.
Again, that is anyone’s guess, partly because it depends on so many uncontrollable factors on the world stage as well as domestically. However, one thing is that at some point, something has to shift, and it could well be that this happens in the coming twelve months, especially as there will be keen political reasons for this to happen. But again, it is impossible to say whether it will happen, how quickly, or by how much rates might decrease.
What are the mortgage options?
Because of that, a lot of people will find themselves wondering what mortgage options there are out there and which might be suitable for them. This can be a challenging thing to answer, but again there are a lot of issues which need to be worked through. Also here you have the matter of personal situation – everyone is in a slightly different place with their finances, which affects what kind of mortgage they are likely to get and how much they are going to be able to borrow, alongside many other factors too.
One of the most common concerns here is for people with poor credit ratings, who are always going to struggle more to get a mortgage but might well have some options available. It can seem to be a particularly tough time for those people right now, however, with interest rates soaring and mortgages failing to come down at all.
However, there are options for such people. One such option is the bad credit mortgage, which is becoming increasingly popular as more and more people find themselves in this kind of situation. The fact that such mortgages have to exist shows what kind of a situation we are in, and there is no doubt that it looks likely to become more popular over the next couple of years at least.
There are also other mortgage options, as ever, for people in different circumstances – such as mortgages specifically for the self-employed. So for those looking to buy a home, these should be considered well.
Help with buying
As well as the mortgage options, there are of course a lot of different kinds of help that people can seek out in terms of actually being able to buy a property in the first place at all. For instance, there are help to buy schemes and the like which a lot of people might benefit from, and these are certainly to be looked into for anyone trying to make it easier to buy their own home. However, a lot of these schemes do not apply to the majority of people, and it’s therefore something to think about when someone is in the position of looking for help.
Still, these schemes should be researched, because sometimes they are the main kind of help that someone needs in order to be able to buy property.
For lower-risk borrowers, there are always going to be even more options available, naturally. And this is likely to continue, even with the rise of interest rates being what they are and even if that continues for a good while yet. Remortgaging is often cheaper, and there are lots of low-rate mortgages for those who are eligible, so these should be considered by those individuals as well. All in all, this is going to become more a part of the landscape over time too.
As you can see, the world of mortgages is in as much uncertainty as ever. But with the right approach and some foresight, someone should still be able to find the right mortgage for their needs.