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All you need to know about how Brexit has changed mortgages


The political and economic climate in the UK remains riddled with uncertainty, so banks and lenders have adapted their products in an attempt to weather the storm caused by the prospect of Brexit.


For those looking to get onto the property ladder or expand their portfolio, some new attractive mortgages have been launched.


This includes loans with free gifts, a fixed rate period extended to 10-years and buy-to-let mortgages designed for UK nationals living abroad.


Here’s a round-up of some of the new mortgages available this year:


Mortgages with free gifts


To entice first-time buyers, Santander has bolstered two of its mortgage products by adding some freebies to the deal.


On the 95% loan-to-value mortgages, Santander has introduced a free valuation along with a cashback gift of £500 upon completion.





Tailored to first-time buyers, these deals are available with the two-year fixed rate mortgage at 2.99% and the five-year fixed rate at 3.39%.


Commenting on the changes Miguel Sard, managing director of Santander Mortgages said: “We know a lot of first-time buyers opt for 2 and 5-year fixed rate mortgages.


“By offering free valuations and introducing £500 cashback, we hope to give customers a helping hand towards the cost of kitting out their dream home.”



Extended fixed-rates


It’s been a busy year for Santander, as well as adding free gifts it has launched a new product with extended fixed-rates.


The average mortgage is fixed for two or five years but in April, the bank created a new product loan with a 10-year fixed rate.





It is a 60% loan to value and fixed at 2.39% for purchase or remortgage options. It has a £999 fee.


Mr Sard added: “We know a lot of FTBs opt for two- and five-year fixed rate mortgages.

“By offering free valuations and introducing £500 cashback, we hope to give customers a helping hand towards the cost of kitting out their dream home.”


Deposit-free mortgages


One of the hardest things about getting onto the property ladder is being able to muster up enough savings for a deposit.


That’s where the new guarantor mortgages come in.


Several providers now offer you the opportunity to secure a mortgage deal with the help of savings from a family lender.




An example of this is available from Saffron Building Society who has launched a 95% loan-to-value mortgage in which the 5% deposit can be paid by a family member.


Buyers on this mortgage will pay 2.97% interest (4.64% APRC) over a five-year fixed-rate period.


The contribution would be held in a savings account for the five-year length of the mortgage and returned with interest of 0.75%.



Buy-to-let mortgages abroad


You can take the landlord out of the UK but you can’t take the UK out of the landlord - when it comes to mortgages at least.


The Mortgage Lender has launched two new buy-to-let mortgages exclusively available to expats with a salary of at least £40,000.





The first of which includes a 70% loan-to-value two-year fix at 3.95%, and a 70% loan-to-value five-year fix at 4.35%.


You can borrow up to £750,000 and there is a £150 application fee.


While it opens up the potential to expand your property portfolio overseas, a condition of the mortgage is the repayments must be made into a bank account based in the UK.


Interest-only mortgages


It has been predicted that by January 2024, approximately 250,000 Britons will have reached the repayment date for their interest-only mortgage - without being able to find a new deal elsewhere.


Kensington Mortgages chief executive Mark Arnold said: “This is a big problem that is lurking in Britain’s financial system. It’s important that people start thinking about this issue now, before thousands of homeowners find themselves facing a giant repayment bill that they are unable to deal with.


“Society has changed a great deal in recent years. Yet the big banks, driven by risk considerations, now lend to fewer and fewer people. The people who will be facing these bills will have a very different customer profile at the expiry of their mortgage than they did 25 years earlier when they took out these products.




Confused?


Finding the right mortgage for you can be a complicated process. It is important that you do you due diligence based on your personal circumstances.


Landlords and Tenants alike can keep up-to-date with the latest industry changes and news by subscribing to our bi-weekly newsletter, visiting our website or following us on Linkedin.

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