Mortgage Criteria & Indicative Rates – November 2024

Residential mortgages – First Time Buyers - No or limited deposit

• Potentially no 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.
• Borrowing around 4.5 times total income is an approximate rule of thumb.
• Mortgage rates based on a 10% deposit now starting from 4.51% for a fixed rate.
  
  
  

Residential mortgages – larger deposits of 15% or more

• Contrary to media reports, it’s still 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 starting from 4.13% for a fixed rate and a 15% deposit. Rates starting from 3.84% for a 40% deposit.
• Interest only or part interest only an option if  25% deposit or greater.

Lifetime Mortgages

• Aimed at over 55s. We have access to later life lending mortgages aimed at helping older borrowers move home or retain their existing home and release equity. Rates typically start from around 5.5%.

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 3.49%.
  
  
  

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 7.25%, Halifax 8.49%, Natwest 7.99%, Nationwide 7.74%, Barclays 6.99% and HSBC 6.99%.
• Key Central Bank Interest Rates: Bank of  England 5.00%, US Federal Reserve 4.75%, European Central Bank 3.25%, Chinese Base Rate 3.10%.
• UK inflation rate – Latest Consumer Price Index reading was 1.7% for the 12 months to Sep 2024 - this represents it’s lowest annual rate since Apr 2021.
• Nationwide House Price Index (Oct 2024) - Typical UK property according to Nationwide now costs £265,738 which is 2.4% 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.partners/45F8S4T/2CTPL/
• 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

Markets expect the Bank of England to cut the base rate when it meets in November but the Chancellor’s Budget has left it unsure about a further reduction this year. Most economists forecast that the Bank’s rate-setting Monetary Policy Committee will unveil a 0.25% cut in the cost of borrowing, bringing the rate down to 4.75%. Deutsche Bank senior economist Sanjay Raja says the vote on the nine-strong committee will be overwhelming, however, markets are still digesting Chancellor Rachel Reeves’ October Budget. This will result in extra spending of almost £70bn over the next five years, a little over 2% of the country’s gross domestic product. The Office for Budget Responsibility says £36bn of this will come from tax hikes, while £32bn will come from borrowing. The public finances watchdog forecasts this surge will see the economy grow by just over 1% this year, rising to 2% in 2025. It also expects inflation to lift by around 0.5% with general prices projected to rise to 2.6% at their peak in 2025, “and then gradually fall back to target”. Inflation is currently 1.7%, below the Bank’s 2% target. The boost to the economy has left markets betting that the MPC will pause after November and not follow through with a second base rate cut in December.

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