With reductions in mortgage rates, we ask a Financial Adviser to share his outlook for the future

You’ll no doubt be aware of the reductions to fixed-rate mortgages announced in the news recently, with more predicted over the coming weeks. We spoke to Jason Blunden, Founder of Evolve Financial Solutions about his outlook for the future and asked him; what IS the new ‘normal’?

Mortgage rates are falling, but the base rate is still increasing, what does this mean for homebuyers?

Economists believe this is a short-term issue, but with inflation decreasing, they see it as a positive development. If the swap rates fall further, we will see more reductions in fixed rates, which is good news for homebuyers.

Will we see mortgage rates fall back to those seen pre-pandemic?

Over the past 20 years, the average base rate has stood at 3.09%, based on data from the Bank of England. The highest rate during this period was 5.75%, while the lowest was notably at 0.10%. Personally, I believe that a base rate of around 3.5% represents a typical and balanced level for a normal economic environment.

Things that aspiring first-time buyers should consider.

Everyone has differing needs regarding their personal budgets. We live in an era of subscriptions, drive-thru’s and instant shopping gratification, so it’s a good idea to talk to a qualified independent mortgage broker. They will work with you to assess and develop your personal budget and make you aware of potential spending pitfalls.

Homebuying is usually a ‘head and heart’ decision. Falling in love with a property that turns out to be unaffordable can be devastating, so it’s crucial to have a proper understanding of your finances upfront.

With talk of “a buyer’s market” – what incentives are out there?

There are plenty of properties available to buy, so you can be quite selective when searching for a new home. The great thing about new build properties is that, on average, they are £200 per month cheaper to run than pre-owned properties. Not only does this help your budget, but there are some fabulous incentives in the market at the moment, such as Allison Homes’ mortgage incentive. Incentives like this can allow you to transform your mortgage rate into something that looks more like 3%, significantly lowering your monthly payments.

What to do if your current (fixed-rate) mortgage is due to expire soon.

It’s currently possible to secure your upcoming mortgage option up to six months before its expiry date, so it’s worth engaging with an independent mortgage broker at this stage. A reputable broker can help you to understand and plan your budget, even monitoring rates for you, until the expiry date. If rates decrease, your broker should be offering you the opportunity to switch to a more favourable deal.

Ensuring that you’re in a good financial position in the future.

To prepare for the future, you should assess your current financial commitments and identify any expenses that you don’t utilise and can eliminate. The crucial step is to seek independent mortgage advice to gain a clear understanding of your finances and current costs. This will help you to start budgeting effectively.

And if you’re worried, remember the golden rule…

Don’t rely solely on news headlines as they tend to focus on the negatives. Instead, consult a reputable independent mortgage advisor to tailor a mortgage solution that suits your personal situation.

Many incentives, such as those offered by Allison Homes are there to help you. You’ll be pleasantly surprised by what’s within your affordability range, so be proactive in exploring your options and don’t hesitate to ask for guidance – help is out there.

Click here to watch the full interview with Jason on our YouTube channel.