Mortgage Criteria & Indicative Rates – November 2023

Residential mortgages – 5% to 10% deposit

• Minimum 5% deposit – we have access to schemes such as shared ownership / deposit unlock and guarantor mortgages – please ask for details.
• Ideally a good credit rating and on electoral role on these deposit sizes.
• Approximately 4 to 4.5 times total income is an approximate rule of thumb.
• Mortgage rates based on a 10% deposit now starting from 5.04% for a fixed rate.
  
  
  

Residential mortgages – larger deposits of 15% or more

• Contrary to media reports, it’s possible to borrow in the region of 4.5 to 5.5 times your income. Generally, the higher the income the greater the chance of getting approval for 5 times income or higher.
• Some adverse credit is more likely to be tolerated on a 15% deposit or more.
• Mortgage rates typically starting from 4.87% for a fixed rate and a 15% deposit.
• Interest only or part interest only an option if  25% deposit or greater.
  
  
  

Investors – Buy to Let

• Most lenders generally require a 25% deposit as a minimum. 
• Excellent to good credit rating otherwise likely to be declined.
• Options available for clients with minimal provable income.
• We can assist with standard personal BTL mortgages as well as areas such as limited company buy to lets / HMOs / Holiday lets / Expats too.
• Rates on BTL mortgages based on 25% deposit priced from 4.64%.
  
  
  

Commercial Finance – Purchase of premises / offices / hotels / property portfolios / development finance / bridging loans

• More discretion shown by lenders on requirements as cases judged on individual merits but typically looking for 25-30% deposit absolute minimum. Rates start from around 7% but priced by lenders on an individual basis. We can assist with these types of finance enquiries too.
  
  
  

Overseas Investors & Expats

• For clients that don’t reside or domicile in the UK there are many lenders we have access to that can assist or if you paid in a currency other than GBP.
  
  
  

Standard Variable Rates, Key Interest Rates and House Price Indices

• Standard Variable Rates: Santander 8.5%, Halifax 8.74%, Natwest 8.24%, Nationwide 7.99%, Barclays 8.74% and HSBC 6.99%.
• Key Central Bank Interest Rates: Bank of England 5.25%, US Federal Reserve 5.25%, European Central Bank 4.00%, Chinese Base Rate 3.85%.
• UK inflation rate – Latest Consumer Price Index reading was 6.7% for the 12 months to September 2023 and is trending downwards.
• Nationwide House Price Index - Typical UK property according to Nationwide now costs £259,423 which is down 3.3% higher compared to 12 months ago.
  
  
  

Things to consider before applying for a mortgage

• Check your credit file to ensure there are no nasty surprises on your report. Here is a link to download your file which grants you access to the main 3 credit agencies used by lenders: https://www.checkmyfile.com/credit-report.htm?ref=alexgroom&cbap=1
• Check to see you’re on the voters role – www.gov.uk/electoral-register/viewelectoral-register
• Ensure your bank account balance is not exceeding any overdraft limit so that you live within your means.
• Determine your maximum purchase price and ensure a mortgage will be affordable prior to making an offer – this is something we can assist with.
  
  
  

Economic, mortgage and housing commentary

Mortgages available at 95% loan-to-value stand at the highest point since before Kwasi Kwarteng’s fiscal announcement of September 2022. This is according to data from the latest Moneyfacts UK Mortgage Trends Treasury Report which reveals a thriving choice of mortgage options. The report shows that the number of deals at 95% loan-to-value (LTV) has risen to its highest point (254) since before the fiscal announcement (274 deals at the start of September 2022).

The number of options at 90% LTV rose month-on-month and stands at its highest count (709) since February 2022 (735). Product choice overall rose month-on-month, for a fourth consecutive month, to 5,678 options, the highest level of availability in over 15 years. The last time there were more deals available was March 2008 (6,192 products). The average shelf-life of a mortgage product rose to 20 days, which is its highest since June 2023 (22 days). This has now increased for four consecutive months from a low of 12 days in July, which was the shortest average shelf-life on Moneyfacts’ records.

Contact Ben Edwards at ben.edwards@agamortgages.co.uk or on 07464 971654 should you need any mortgage advice prior to buying.

Any rates mentioned here are indicative only and not to be relied upon. Please contact us for a personalised illustration.

Website: www.agamortgages.co.uk