If you think property prices are likely to reduce in months to come, and are hoping that mortgage rates will fall further, you might be considering postponing your purchase.
On the other hand, if you feel that rates are as low as they’ll get this year or you’ve had a change in circumstances that means you need to move, you might be feeling pressed to buy as soon as possible.
Do you own property already or are you buying for the first time?
- One important variable that might make a difference to your decision is if you’re already on the property ladder, or you’re buying for the first time.
- If you’re a first time buyer, and don’t have to buy now, you may be better off continuing to rent for now and waiting to see how things unfold. With the market so volatile, there’s a chance you could regret throwing your hat into the ring too soon, particularly if property prices end up falling and interest rates go down.
- If you already own a property and are thinking about moving, then chances are you’re paying off your current mortgage on your lender’s SVR. While there’s no surefire way of telling which way the market will move next, SVRs are already painfully high, with the average SVR currently at an eye-watering 8.18%.
- This could be an argument for closing on a new property sooner rather than later, as even though your new fixed-rate deal will probably be at a high rate, it will stay put once you have it, and it’s very unlikely to be as steep as the SVR. However, depending on your circumstances, this might be a better argument for remortgaging your current property than buying a new one altogether.
- If you’re worried about buying because of high mortgage rates, and you have some savings which you’re not putting towards your property purchase as you want to keep a financial buffer available, you might want to look at ways you might be able to reduce your monthly costs.
- For example, you might want to think about lengthening your mortgage term to keep your monthly payments down. Bear in mind, however, that you’ll end up paying more interest overall if you do this, and you’ll need to prove to lenders that you’ll be able to keep up with your repayments into retirement.
- While not every expert can agree on where the mortgage market is headed, there’s one thing they will all agree on, you should seek advice before you make a decision.
