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Best mortgage products

Journalist: Jake Carter, Mortgage Introducer

ended 27. June 2023

What products do you think are best for clients at present?

What products are you advising clients to take on?

Are variables being advised at all? Which specialist products are of the most interest right now?

6 responses from the Newspage community

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Editor
Jamie Elvin
Director at Strive Mortgages
The most suitable product will depend on the client's circumstances and attitude towards risk, as well as the available options. Tracker rates, although they come with a high degree of risk, may offer interest rates that are over 1% lower than equivalent fixed-rate products. Some trackers are offered from as little as 0.15% above the base rate. Therefore, even if the base rate were to rise by a further 1%, the tracker may still perform similarly or better than fixed rates over the period. There is certainly potential in the tracker, but if you prefer certainty, it is probably worth considering a fixed-rate option
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Craig Fish
Director at Lodestone Mortgages
There is no right or wrong answer to this question. After assessing all client's circumstances and providing them with recommendations, we are seeing most clients opting for 2-year fixed rates. They feel that rates may rise a little further but that they will fall back by the time they come to reassess their options. That said I still have the odd, high-net-worth client that is opting for tracker products with full flexibility. We are also seeing an uptake in bridging finance and secured loan inquiries for debt consolidation.
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Elliott Culley
Director at Switch Mortgage Finance
Its a really difficult market to predict right now. Up until last month 2 year fixed deals looked like a good option as rates were forecast to drop in 2024-25. Right now who knows if these forecasts will be right or not. Clients are tempted by the 5-year option, but some do not want to be looked in case there is a drop in 24-25. right now if a client wants stability a fixed rate option is the way to go. If they are willing to take a risk or have more net disposable income, then discount variable products could be an option for some. These do not automatically go up in the same way a tracker product does. They are based on the lender's standard variable rate(SVR), and most lenders have not upped their SVR to the same percentage points as the Bank of England. There are some interesting products outside the normal fixed and clients need to be informed of these options, as all we hear in the media is about fixed rates.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Advice is and always should be tailored to the individual and their own needs and plans; so there is no "best product" that is suitable for all, or even the majority, of clients. Many factors enter into this; from what the client's vision of the next few years looks like for them - will they need to move, borrow more against the property, or maybe be able to pay a chuck off? Then there are external factors, such as LTV and affordability - most lenders will lend you more on a 5-year fixed rate than on a shorter-term deal or a variable rate, likewise, many lenders will only allow you to do a 90% or 95% mortgage on a 5-year fixed deal. Finally, you also have to account for your client's attitude to risk (not just a consideration for our wealth advising colleagues), as some people will be far more willing to take the "risk" of a 2-year fixed rate or variable rate, whereas others will simply want the surety of a longer period fixed rate "just in case".
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Matthew Jackson
Director at Mint FS
Best is pretty subjective - as not every product will suit every client.

However in general we are still seeing our applications split primarily between longer term fixed rates and variable rates for residential purchase.

We use regional building societies quite a lot - and a number of our advisors are particularly keen on Newbury BS and the discounted rates they offer for purchase and remortgage. Hugely flexible with interest only and allow 20% overpayments per month which suit a lot of High Net Worth clients.
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Adam Smith
Founder at Alfa Mortgages

Determining the ideal product for each client is contingent upon their unique circumstances. However, we have observed a growing trend among clients who prioritize stability in their finances. Many are seeking options to fix their repayments for a defined period, typically ranging from 2 to 5 years. The choice of duration is highly subjective and closely tied to their outlook on interest rates. By understanding their individual needs, we can guide them towards the most suitable solution that aligns with their financial goals and aspirations