There is a lot of interest in the mortgage market right now – it’s on the front pages and is the subject of significant political debate.
Rising mortgage rates create concern among mortgage holders and people looking to get on the housing ladder.
Cost-of- living pressures and higher rates, coupled with steep house prices, are affecting affordability.
People are looking at their finances closely and making decisions about what they can afford.
Most mortgages are fixed rates – about 80 per cent of residential mortgages are fixed – so those borrowers don’t see any immediate change in their monthly payment if Bank Rate rises.
Support: UK Finance chief executive David Postings (pictured) says people are looking at their finances closely and making decisions about what they can afford
Around 800,000 of these are due to end later this year and a further 1.6m in 2024.
For those looking to get a new mortgage or re-mortgage, there is understandable frustration when lenders pause or withdraw products.
The reason they do this is to manage service levels as they are dealing with large volumes of applications and responding to pricing factors outside their control.
However, industry-level data shows there is still good mortgage availability across all loan to value bands.
Rishi Sunak has highlighted how there is support available for people worried about their mortgage. The Prime Minister is absolutely right.
Anyone who is worried should contact their lender at the earliest possible opportunity. People often leave it too late, but it’s much better to do this before missing a payment.
Contacting your lender to find out the options available won’t impact your credit score, but missing payments will.
There has also been concern around arrears and repossessions with some alarmist headlines.
But the number of households in arrears remains close to historic lows, which tells us that the majority of homeowners are keeping up with their payments.
Similarly, while repossessions are increasing, they are also doing so from a very low base and the numbers are much lower than in previous years.
Over the past year lenders have helped nearly 200,000 borrowers who cannot meet their full mortgage payments by providing tailored forbearance.
This could be a period of reduced payments, a period of zero payments or a temporary switch to interest-only.
Lenders have teams of experienced and understanding advisers who will develop a solution tailored to your individual circumstances.
We are in the midst of a really challenging economic environment, and there could well be more pain ahead. Lenders stand ready to help.
David Postings is chief executive of UK Finance
