In November, 40.48% of all mortgages arranged for Rose Capital clients were fixed rates, down from 83.61% in October and a massive 90.12% in September. In contrast, tracker products have leapt in popularity, with 35.71% of November clients snapping up these mortgages versus only 8.2% of clients in October, an almighty increase of 404.5% in just one month.
It’s a similar story for discounted mortgages. In September, only 1.23% of Rose Capital clients secured a discounted mortgage product. This rose slightly to 1.64% in October and then jumped to 14.71% in November.
However, market uncertainty means that some lenders are still continuing to offer fixed-rate mortgages even though they are vastly more expensive than tracker or discounted mortgages. In addition, after 13 years of advising borrowers on cheap fixed-rate products, brokers are now having to acclimatise to this new lending environment where unfamiliar tracker and discount products are of better value.
November examples of market-leading mortgage rates (previous month in brackets):
2-Year Fixed Rates from 5.00% (5.49%)
5-Year Fixed Rates from 4.84% (5.17%)
10-Year Fixed Rates from 4.89% ( 5.09%)
Variable Rates from 3.29% (2.85%)
(Source: Twenty7Tec November 2022)
The actual rate you will be offered will be dependent on your personal circumstance and deposit level.
Richard Campo, Founder of Rose Capital Partners, comments: “Given that some lenders are still only offering fixed rate products, it’s now more important than ever that borrowers seek professional advice from an experienced mortgage broker to ensure that they find the right loan for their circumstances. For so long now, it has been the trend to secure a fixed-rate product, with the help of comparison and sourcing platforms, as most fixed rates were similar in structure and cost.
"But with today’s tricky market conditions and the wide variety of mortgage products that are emerging, it’s time to get back to the basics of traditional broking - taking a full background brief from clients, talking one-to-one with all types of lenders, and staying abreast of which products are coming onto the market. Therefore variable rates have to be a large part of the conversation at present.”
In terms of the most competitive products on the market, smaller building societies are offering the most attractive loans. Over the past 3 months, Rose Capital has seen a considerable increase in the business it has placed with building societies, up by 88.45% since September 2022.
Campo concludes: “Building societies are offering some really cheap discount rates currently, circa 3.5% vs a market average of circa 5% for a fixed rate, which is very attractive for our clients. They provide excellent customer service and often take a more comprehensive, longer-term view of borrowers, working with them to tackle a complex income or the odd credit blip. As brokers, we have a responsibility to consider recommending discount or tracker rates from smaller lenders rather than stick with what we know.”
