Some mortgage rates fall as borrowing rules change

1. MESSAGE FROM SIMON DURANT BA, CeMAP, CeRER

It's been a slightly more encouraging week for anyone keeping an eye on mortgage rates, with several familiar lenders cutting selected deals. But I wouldn't describe it as a sudden turnaround. Rates still vary a lot depending on your deposit, your circumstances and the type of mortgage you need.

There's also a change to borrowing rules that may give some lenders a little more flexibility, particularly for first-time buyers.

As ever, my advice is to focus less on trying to guess what will happen next and more on what makes sense for you. That's what we're here to help with, whether it's a mortgage, protecting your income or simply making sense of the headlines.

2. MORTGAGE MARKET REVIEW AND CHANGES

Some mortgage rates are coming down

HSBC and NatWest have announced reductions to selected mortgage rates this week.

HSBC has brought back some fixed rates below 5% for borrowers with larger deposits or more equity in their homes. NatWest has cut some residential remortgage rates by as much as 0.17 percentage points, alongside changes to other parts of its range.

That's welcome news, but it doesn't mean every rate is falling or that everyone can access those headline deals.

A lower rate may also come with a product fee, so it is important to compare the overall cost.

What this could mean for you

If you're moving or your existing deal ends in the coming months, it may be worth reviewing the options.

Comparing an offer from your current lender with suitable alternatives can help you make a more informed decision. There is no need to rush based on one lender's announcement.

How Durant & Co can help

We can look at the rates, fees and monthly payments together and talk through which options fit your plans and budget.

Source: Financial Reporter. Source: Mortgage Soup.

Another small improvement for some low-deposit buyers

Accord Mortgages has announced further cuts to selected residential mortgage rates from 16 October, including deals for people borrowing up to 95% of a property's value.

Its fee-free five-year fixed rate on the £5,000 Deposit Mortgage is due to fall from 6.78% to 6.58%.

The £5,000 Deposit Mortgage is designed for eligible buyers who have found saving a larger deposit difficult.

It is not a general offer of a mortgage to anyone with £5,000 saved.

What this could mean for you

A smaller deposit may give some buyers a route to consider, but it can mean borrowing more and paying more interest overall.

The property, your income, your spending and your credit history still need to meet the lender's rules.

How Durant & Co can help

We can look at whether buying with a smaller deposit is realistic for you and compare that with the cost of waiting and saving more.

Source: Financial Reporter. Source: Mortgage Soup.

Mortgage borrowing rules are becoming a little more flexible

The financial regulators have confirmed a change taking effect on 28 October.

Previously, individual lenders were generally limited in how many mortgages they could offer at more than four and a half times a borrower's annual income.

That individual lender limit is being removed, although controls on higher borrowing across the market remain.

In plain English, some lenders may have more room to consider applications from people who need to borrow a higher amount compared with their income.

This could be particularly relevant to some first-time buyers, but lenders still decide their own rules.

What this could mean for you

It is not a new entitlement to borrow more, and it does not remove affordability checks.

If you've previously struggled with the amount a lender was prepared to offer, it may be worth checking whether your options have changed rather than assuming the answer is still the same.

Source: Financial Reporter. Source: Mortgage Solutions.

Fewer people are moving, while more are reviewing their mortgage

Figures published by Yorkshire Building Society show that applications from people moving home were 10.2% lower in the three months to late September than in the same period last year.

First-time buyer applications fell by 3.5%, while remortgage applications rose by 12%.

That suggests many existing homeowners are concentrating on their next mortgage deal, while some prospective movers are taking more time over a big decision.

What this could mean for you

If you're looking to buy or move, focus on what is happening in your local area, rather than assuming every property market is the same.

And if you're staying put, knowing when your deal ends and what a new payment might look like is a useful starting point.

Source: Mortgage Solutions.

3. PROTECTION MARKET REVIEW AND CHANGES

Affordability is a big part of choosing protection

New research reported this week found that 43% of adults surveyed who did not have protection said price was the most important factor when considering it.

The same research also found interest in extra health services, including virtual GP access.

It's understandable to keep an eye on the monthly cost.

But different policies do different jobs.

Life insurance is generally designed to pay out if you die during the policy term.

Critical illness cover can pay a lump sum if you meet the policy definition for a covered illness, while income protection can help replace part of your income if illness or injury stops you working.

The exact cover, limits and exclusions depend on the policy.

What this could mean for you

If you are reviewing cover, start with what you would need it to do and what you can realistically afford.

A cheaper policy is not necessarily better value if it leaves out something important to you.

Any extra wellbeing services also need checking rather than assuming they come with every policy.

How Durant & Co can help

We can explain the differences, look at your budget and help you compare cover that is appropriate for your circumstances.

Source: COVER.

You may already have more support through work than you realise

A Simplyhealth survey, reported by COVER, found a gap between employers who said they offered mental health support and employees who said they had access to it.

In the survey, 61% of employers reported offering this support, while 41% of employees said they had access.

The practical point is simple: it is worth checking what your employer provides.

That might include a confidential support line or other wellbeing services.

Some workplaces also offer life cover or income protection, although these benefits are not automatic and vary from employer to employer.

What this could mean for you

Ask your HR team for an up-to-date list of employee benefits and check when they apply.

If you're changing jobs, find out whether any cover would end when you leave.

Workplace benefits can be useful, but they should be considered alongside what your household would actually need.

Source: COVER.

4. THANK YOU

Thank you for taking a few minutes to catch up with us this week.

There is always plenty being said about mortgages and insurance, but not every headline needs to change your plans.

If anything we've covered has raised a question, you're very welcome to get in touch for a straightforward chat. No pressure, just help with understanding your options.

The Durant & Co Team