Mortgage Criteria & Indicative Rates – December 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 4.64% 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 4.43% for a fixed rate and a 15% deposit. Rates starting from 4.09% 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 5.79%.

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 8.24%, Natwest 7.74%, Nationwide 7.49%, Barclays 6.74% and HSBC 6.99%.
• Key Central Bank Interest Rates: Bank of  England 4.75%, US Federal Reserve 4.75%, European Central Bank 3.40%, Chinese Base Rate 3.10%.
• UK inflation rate – Latest Consumer Price Index reading was 2.3% for the 12 months to Oct 2024.
• Nationwide House Price Index (Nov 2024) - Typical UK property according to Nationwide now costs £268,144 which is 3.7% 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

Nationwide has reported annual house price growth for the 12 months to November 2024 at 3.7%. Their Chief Economist, Robert Gardner stated these figures show “a strong rebound compared to the previous month and marking the fastest rate of annual growth for two years. House prices increased by a robust 1.2% month on month, after taking account of seasonal effects, the largest monthly gain since March 2022. House prices are just 1% below the all-time high recorded in the summer of 2022.
He further added “The acceleration in house price growth is surprising, since affordability remains stretched by historic standards, with house prices still high relative to average incomes and interest rates well above pre-Covid levels. The pickup in price growth is unlikely to have been driven by upcoming stamp duty changes, since the majority of mortgage applications commenced before the Budget. Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the higher interest rate environment. Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year”.

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