Are you an expat with a UK mortgage?

Mortgage rates are unlikely to improve in the near future so now is the ideal time for borrowers to secure a fixed-rate deal on their mortgage. Borrowers who are on a standard variable rate (SVR) or coming to the end of their term have the potential to save themselves thousands of pounds on their mortgage

The savings can be substantial and very rewarding.

The near all-time low rates will not last forever, the wise expat should look to secure a deal and speak to an independent broker straight away.

Independent brokers

Not only can brokers offer a far wider range of products and options for consumers which they may otherwise not have access to, or the time to find, but their invaluable expertise will be able to help you secure a great deal on your mortgage.

What does a mortgage broker do for expats?

Essentially, they are there to help expats find the best mortgage deals in the UK. They aim to make that as simple and stress-free as possible, looking at each person’s situation and finding the best product to match their needs.

Coronavirus – Expats are asking, can I still apply for a mortgage?

Definitely yes! One big difference between the challenges of 2020 and the economic turbulence of 2008’s credit crunch is that there is no issue with the liquidity for banks and building societies.

They have the means and the willingness to lend. However, what we are seeing are disparities with how each lender responds to the current situation.

Need assistance?

Our professional independent advisers are used to dealing with all types mortgages, they have vast experience in the expat mortgage market.

Expats surge in interest

Overseas buyers and expats are sizing up the UK property market for potential bargains, taking advantage of the weak pound and falling property prices, according to the latest figures released

The property portal found that searches for UK property by overseas buyers have grown steadily over the last 12 months. They now account for 6.6% of all activity on the portal in the first three months of this year, compared to just 3.6% three years ago.

It said some investors are keen to capitalise on softening prices and a weak pound and are looking for discounts.

More expats choosing broker assistance for mortgages

The number of expat mortgages coming through brokers has risen steeply over the last 2 years, this figure now stands at 71% from 64% last year.

There has been a steady increase in mortgages sold by intermediaries to expat buyers and re-mortgagers as the market remains very buoyant indeed.

Independent broker benefits

  • Full range of mortgage choices
  • Industry qualified advisers
  • UK based for easy communication
  • Fully automated service
  • Faster completion

Assistance required

If you would like help with your new or re-mortgage, please make contact and one of our advisers will be happy to help.

Expats are reviewing their mortgage deals since Brexit

There has been a surge in re-mortgage activity this year, as expat borrowers look to lock into cheap deals ahead of an expected interest rate rise.

Since the financial crisis in 2008 mortgage rates have steadily fallen. This led to a number of lenders slashing their rates and competition in the mortgage market heating up.

However, with the Bank of England hinting that it could raise interest rates for the first time in a decade in order to curb inflation, economists are predicting a hike could come as soon as November this year. Record low mortgage rates continue to sustain market activity but given even the most dovish members of the Bank of England’s Monetary Policy Committee are now adding to the calls for an interest rate rise, this picture could very quickly change.

A “wait and see” approach is best avoided for existing expat UK homeowners considering re-mortgaging.

The number of expat mortgages approved also went up for the second month in a row, suggesting the market is picking up steam following the UK leaving Europe and now the Coronavirus.

Expats who avoid reviewing their current mortgage deal could well pay for this error in the long term as interest rates look to be going upwards. Not everybody will benefit from changing their mortgage, but it certainly makes sense to check how your existing deal stands up to the future.

Contact us.

If you would like to review your current mortgage please make contact and one of our advisers will be happy to help.

 

Expat mortgage rate news

The Bank of England has refused to rule out cutting interest rates to below zero to boost the economy, but the move would penalise savers while rewarding homeowners.

The Bank’s governor, Andrew Bailey, has confirmed that negative interest rates are under “active review” after being questioned by MPs on Wednesday. Speaking at a hearing with the Treasury Select committee he told MPs that the Bank was looking at how effectively other central banks have used negative interest rates. He said “We do not rule things out as a matter of principle. That would be a foolish thing to do. But can I then follow that up by saying that doesn’t mean that we rule things in.”

Policymakers are considering negative interest rates after official figures showed that inflation had fallen to a four-year low of 0.8% in April – well below the Bank’s 2% target. The Bank has already cut the base rate to a record low of 0.1% to help support the economy amid concerns about the coronavirus pandemic. Lower interest rates can be used to help boost the economy as they make it cheaper for households and businesses to borrow money.

Japan’s central bank and the European Central Bank have both already adopted negative interest rates.

How do negative interest rates work?

If a country’s central bank sets its base rate below zero, high street banks must pay to deposit cash with it.

It is an extreme measure designed to encourage banks to lend more money to businesses and consumers in order to stimulate the economy.

For example, if the interest rate goes below zero it will encourage high street banks to offer cheaper loan rates to the public.

How could negative interest rates affect savings?

For savers negative interest rates are huge problem as they will see their cash eroded. This is because they are will be charged by banks to look after their cash. If the bank cuts the base rate below 0% this means further woe for savers who have already seen rates plummet this year.

The situation for savers is desperate and things just continue to get worse. If anyone does offer negative savings rates it would be the big banks, but I do not see it happening. Savers faced with having to pay to keep their money with a provider will find other things to do with it.

Expats interest rates are down

The average interest rate for two-year and five-year fixed rate mortgages has dropped to the lowest level since records began in 2007.

Why are mortgage interest rates dropping?

The Bank of England has made two emergency cuts to the base rate (the bank’s set interest rate for lending to other banks) in response to the coronavirus pandemic.

These have reduced the base rate to a record low of 0.1%.

This fall in the official cost of borrowing has impacted swap rates (when two different parties swap interest rates), upon which fixed-rate mortgage deals are based.

Lenders have passed on the reduction in their own costs to borrowers.

Despite being able to make mortgage deals cheaper, banks and building societies have had to review the level of risk they take in lending.

This is due to the impact the virus is having on the UK’s economy.

As a result, many lenders have reduced the number of products they offer those borrowing a high proportion of their property’s value. In other words, those who need a mortgage with a high loan-to-value (LTV).

Is it a good time to re-mortgage?

The record-breaking fall in average fixed-rate deals makes it a great time to re-mortgage Especially if your current mortgage deal is coming to an end.

This is the same for those sitting on their lender’s standard variable rate (SVR).

The typical interest rate charged on an SVR is around 4.5%.

This means that expat homeowners could save more than £2000 a year if they switch to an average two-year fixed rate deal, based on a £200,000 mortgage.

Need assistance?

Our professional independent advisers are used to dealing with all types mortgages, they have vast experience in the expat mortgage market.

 

 

Coronavirus – Expats are asking, can I still apply for a mortgage?

Definitely yes! One big difference between the challenges of 2020 and the economic turbulence of 2008’s credit crunch is that there is no issue with the liquidity for banks and building societies.

Expats should review their UK mortgage and potentially save thousands

Make no bones about it, 2020 is the year of the expat re-mortgage. You only need look at the rates being offered by lenders – particularly in the lower LTV bands. These rates are not going to stay this low for much longer so if you have a expat current variable rate mortgage review it sooner rather than later.

Research suggests that over half of all expat borrowers who move to their lender’s standard variable rate after the current deal finishes don’t re-mortgage or product transfer for 10 years, while a quarter of re-mortgagors were said to find the whole re-mortgage process difficult, with 42% saying they didn’t have time to shop around.

The ‘shopping around’ mentality is clearly far more embedded in the UK consumer than ever before, however this doesn’t always translate to mortgage borrowers, even when the savings can be far more than changing utility company or broadband provider.

Expats need to get the message that re-mortgaging is where substantial savings can be made – especially with rates as they are now. Rates are unlikely to remain this low for much longer so acting now could save thousand in the future.

A re-mortgage is not always suitable for everybody as your existing deal may well have penalties attached to change within the discounted period. It is always recommended to seek independent professional help as to what is best advice to suit your needs.

Like to talk over your mortgage needs?

If you are looking to secure a new or re-mortgage please do make contact and one of our independent advisers will be happy to assist.

 

The mortgage market for expats

In March 2020 the Bank of England made two emergency cuts to the base rate, The cut from 0.25% to 0.1%, made in response to the coronavirus pandemic, means the base rate is at its lowest level in the Bank’s 325-year history.

In the immediate aftermath of this reduction, banks and building societies withdrew some of their mortgage products.

Among the most common deals to be pulled were tracker mortgages and loans for people borrowing a high percentage of their property’s value.

The good news is that lenders that had pulled products are beginning to launch new deals for both fixed rate and tracker mortgages.

It’s very positive that we are beginning to see providers return products to their ranges and launch new deals, including some in the higher loan-to-value sectors.

These changes may be an early indication that lenders have begun to adapt to the exceptional economic and operational changes of recent weeks in order to continue supporting their customers, and that hopefully more providers will be following suit in the days ahead.

How much choice is there if I am looking for a new mortgage deal?

While the number of deals available for expats has continued to fall since the beginning of April 2020, there are still a good range of mortgages to choose from.

Choice is widest for people with large equity stakes in their homes or big deposits to put down.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our qualified independent advisers will be happy to assist.

Expats should take heart

Expats should take heart

The direct and indirect impact of COVID-19 has affected the performance of different sectors and financial markets in different ways. The world’s major indices have suffered considerable losses – recently, it was reported that The Dow Jones Industrial Average crashed by almost 32%.

Other financial assets have so far proven resilient, such as UK real estate

The ‘Boris bounce’

House prices are typically used as an indicator of capital growth for real estate. In 2019, the political deadlock over Brexit resulted in significant market uncertainty and modest house price growth. Some commentators feared house prices would drop significantly as a consequence of Brexit – however unlikely such events actually were.

Boris Johnson’s victory in the 2020 General Election and his subsequent ability to pass the EU Withdrawal Bill through parliament resulted in surging investor interest in residential real estate. House Price Indexes for March 2020 provided evidence to this affect.

Both Halifax and Nationwide recorded that average residential property prices that month were 3% higher than they were the year prior.

With Brexit uncertainty forgotten, sellers were again eager to place their properties on the market. Coupled with the government’s growing excitement about ushering their new ‘housebuilding revolution’, it seemed that the UK was finally ready to confront the ongoing housing crisis and match the growing demand for housing with the adequate level of supply; generating strong increases market activity and a return of strong value returns all-round.

COVID-19 has put a pause on transactions

Lockdown measures imposed by the government in a bid to contain the COVID-19 outbreak has had a significant impact on the real estate market.

For the moment, the government is actively discouraging people from buying and selling properties, and some lenders have reacted to this news by deciding not to take on new enquiries.

However, I believe the momentum around the post ‘Boris Bounce’-market has not disappeared. In fact, in lieu of transactions being available, pent-up demand is likely to further exacerbate market activity once the pandemic is over.

Ultimately, it can be said that COVID-19 has, in a sense, taken the place of Brexit uncertainty in artificially supressing market activity and, thus, property price growth.

This means that once the virus is contained there is no reason to suggest why the property market will not make a quick recovery.

Expats should not hold back

There is no doubt the developments in the expat mortgage market in response to the coronavirus crisis are moving at a frenetic pace. Helping clients is crucial for everyone in the industry currently, keeping on top of all of these updates to help navigate the best options for individuals is very important at this time.

Although you may have seen some press articles on the number of mortgage products decreasing from the market, re-mortgage products are still freely available.

As such, this period represents a great opportunity for expat UK homeowners to save money on their mortgage with some of the great low rates currently available.

If your current mortgage rate is coming to an end, despite this Covid-19 scenario the lender would still hike your rate up to their standard variable if you do not look into your re-mortgage options. There are some great mortgage deals being offered by lenders currently.

You may have seen some press reporting that surveyors are not considered ‘key workers’ and hence are not allowed to go out to visit and value properties (i.e. a “physical valuation”). Therefore naturally, you may be concerned about whether you can apply for a re-mortgage during this time. We have been in continual discussions with lenders and the good news is that more and more lenders are now able to do some valuations for re-mortgages without the need for a home visit, using market data and knowledge of the location to estimate the value. An intermediary can help guide you on what lenders offer these types of valuations.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our qualified independent advisers will be happy to assist.

Coronavirus – Expats are asking, can I still apply for a mortgage?

Definitely yes! One big difference between the challenges of 2020 and the economic turbulence of 2008’s credit crunch is that there is no issue with the liquidity for banks and building societies.

They have the means and the willingness to lend. However, what we are seeing are disparities with how each lender responds to the current situation.

Some lenders have been impacted from a service perspective more than others due to staff shortages.

We are seeing these lenders have to withdraw some mortgage products, or to cap loan to values (the percentage of the property value they will lend as a mortgage against the property) to limit and manage the amount of business they attract, in order to give themselves breathing space.

For example, in recent days some major lenders have temporarily introduced a maximum loan to value of 60% whilst they manage service levels.

What about a valuation?

Physical valuations have been put on hold during this period of self-isolation. This means that valuations are currently deferred for an initial period of around four weeks.

However, this does not mean you should hold off applying for your mortgage. By submitting the application you are locking in the mortgage rate offered with most lenders, which with current fluctuations is worthwhile to secure a low rate on your mortgage.

You can also get the majority of the paperwork and processing done, so that just the valuation will be required.

Also, some lenders will look to do a valuation on a desktop, or automated basis using data and knowledge of the location.

Where these are applicable, and on re-mortgages these are quite common, applications are processing to mortgage offer as normal. A broker can help guide you on which lenders offer these types of valuations.

Need assistance?

Our professional independent advisers are used to dealing with all types mortgages, they have vast experience in the expat mortgage market.