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What's going on in the mortgage market?

Journalist: George Nixon, The Times and The Sunday Times

ended 19. October 2023

Hello! This is a usual check on/request for what mortgage brokers are seeing from their clients in the market at the moment? It sounds very quiet, but I wondered if any clients had been doing interesting things? 

Those coming up to refinancing, how are they managing: Is there much term extending, switching to interest-only going on, what are people doing to manage? 

Thanks, all the best!

11 responses from the Newspage community

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Simon Bridgland
Director at Charwin Private Clients
The flurry of activity at the initial drop of fixed rates has now calmed and cautiousness is back. A couple of clients have in recent weeks spoken to their lenders and made temporary changes, both of which were a change to interest only for 6 months. It’s just to give that breathing space with the festive period approaching which is obviously placing further pressures on purse strings. Remarkably, I had an enquiry from a person who had only just two months ago completed on a purchase at a high loan to value with a specialist lender, enquire about a further advance to debt consolidate and do home improvements. The high loan to value prevented this from happening. They even considered a complete remortgage incurring 10k in penalties to get what they want. Thankfully they took my advice of staying where they were and focus on clearing the personal debts and overpaying on the mortgage. Even the current level of attention to debt in the media doesn’t seem to get through to some people.
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Darryl Dhoffer
Founder at The Mortgage Geezer
Many of my clients have already cut back on their monthly spending, including food shopping and recreational costs, so largely have not been affected by subsequent increases in their mortgage repayments - however, an upward trend in unsecured debts like credit cards and loans has been noted, with many deciding to take these additional debts on just to survive. In a few isolated cases, I have had to look at interest-only deals, with part repayment for some clients just to reduce their monthly outgoings.
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Jack Tutton
Director at SJ Mortgages
Since the end of the stamp duty holiday in September 2021, we have seen an increase in enquiries from clients coming to the end of their 2-year product. Many borrowers leveraged the maximum borrowing to buy their dream home, but are now facing higher interest rates and mortgage balances. We are encouraging them to explore all their options by planning ahead, this is generally 6 months before the end of their existing deal. Homeowners can adjust their finances over this period and avoid the shock of higher payments. Given that mortgage rates are currently reducing, it is important that any product that is secured this far in the future can be changed with the lender should they continue to reduce.

In the purchase market, we have seen people's behaviour change. They are looking for property based on a monthly budget rather than looking to borrow at the maximum they could which tended to be the question we were asked previously.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Homeowners have never sought more advice when it comes to reviewing their existing mortgage to ensure every penny can be saved. So remortgage businesses is strong to compensate the comatose housing market reduction of purchase transactions. Many would be buyers are waiting for mortgage rates and house prices to fall.
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Gareth Davies
Director at South Coast Mortgage Services
Without question we've seen a drop in purchase activity. However, there are still first-time buyers looking, and it's a buyers market for sure. Yes, their mortgage will cost more than it would have done 15 months ago, but rents have gone up too, and paying your own mortgage is still better than paying your landlords.
Remortgage activity is still strong, but the fear that people had back in July seems to have subsided as fixed rates are dropping, albeit a little slowly. One thing we have noticed though, is an increase in adverse credit. Missed payments and defaults have crept back into the mix.
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Richard Thompson
Director at Abbeydale Mortgages
The purchase and buy to let market has slowed down and I have noticed properties staying on the market for a longer period.

I am mostly dealing with remortgages at the moment and seeing on most occasions my existing clients monthly payments increasing by several hundred pounds per month. Tell help offset this large increase there are several customers increasing their term of their mortgage and cutting back on holidays etc
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Peter Stamford
Mortgage Expert at Stamford Home Finance
While some clients have tightened their belts to cope with rising mortgage costs, others are taking on more debt just to get by. It's a mixed bag for sure. First-time buyers are still around, but they're rarer than a "Friends" rerun that you haven't seen before, and way more budget-conscious than before. In contrast, I'm seeing a rise in missed payments and defaults. Some are even considering drastic moves like remortgaging with hefty penalties or downsizing. The best advice is: whether you're buying or remortgaging, planning ahead and understanding your options can make all the difference.
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David White
Chief Operations Officer at Simply Lending
Mortgage Brokers lost one of their most effective tools this year when interest rates returned to pre-financial crash levels.

Previously, switching mortgage deals to attain a more favourable rate was a straightforward process. However, now many borrowers are opting to extend their terms to manage monthly payments effectively and ensure they fall within strict lender affordability rules.

In 2022, our average borrower extended their mortgage to the age of 70.6, but in the same period in 2023, that age has risen to 74.2.

Borrowers need to be well informed and proactive, considering options such as refinancing, downsizing, or extending terms. The mortgage landscape is evolving, and brokers and borrowers alike must adopt creative and informed approaches to decision-making to ensure mortgage commitments remain both sustainable and manageable.

We’re not playing in easy mode anymore.
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Austyn Johnson
Founder at Mortgages For Actors
Same old same old for me. Uber complex mortgages for those who get little help elsewhere. We haven't slowed down over the year, but then we also do not get the volumes of the bigger brand names and can spend a bit more time on each case. We haven't seen anyone needing to switch to I/O, in fact, none of our clients have had a huge issue yet and we do call to check up on them too. Hopefully, next year will see a bit of sturdyness in the economy and prices of essentials will come down a bit.
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Gary Bush
Financial Adviser at MortgageShop.com
Our figures for the past 7 days of new mortgage enquiry activity show a good uptick with applications covering Remortgages with further borrowing, first-time buyer Shared Ownership purchases, and existing homeowner movers. Mortgage existing lender Product Transfer interest from clients is also continuing, account holders are now laser focussed on the all-important discussions we are having with them over the interest rate range available now - this is encouraging.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
It may not grab headlines but a sense of calm seems to have reigned for the last month or so. Rates are still creeping down on the whole and a moment to breathe seems to be precisely what the housing market needed.