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So, as expected the Bank of England have raised their rate by half a percent from 3.5% to 4% on 2nd February 2023. We’ve all been expecting it – but here’s a quick rundown as to why not to panic….

• It wont affect you immediately if you are on a fixed rate, or a tracker/discount rate unless the lenders decide to follow suit.
• In reality, lenders have been consistently lowering their fixed rate products since the last increase. So don’t panic about getting an application in immediately because you are scared that rates will increase sharply over the next few days.
• For context, those who have raised their rates today, are raising them as a result of the last increase in December and not as a result of todays rate news, or are raising from the start of March with payments potentially increasing in April.

So, if you are in a fixed rate, or have a mortgage offer with a fixed rate – there is no change for you right now. Obviously once your rate ends in 2, 3, 5 or 10 years, you will be affected by whatever the rate is then, but as far as any impact right now today, nothing changes for you.

Those on variable rates will be notified by lenders as to the impact. Again, remember that lenders have increased their rates today as a result of the change back in December – so a good 6 weeks before they announced.

If you have a deal that is coming to the end of its term in the next 6 months, get in touch with us today! We have had a flurry of people get in touch really close to their product end date. Remember that although we can sort a product transfer within a day, and put it in place immediately, this locks you to your current lender when there may be better out there. A re-mortgage to another lender can take a couple of months to take effect given the legal work required.

What will it effect?

The biggest impact in our opinion will be the ongoing cost of living impact on affordability. For those who have yet to start a mortgage application, you may find that your maximum borrowing amount lowers as the impact of other costs hits the lenders affordability. Again, key to get all the documents in to a broker to assess to get that figure as accurate as it can be before you start looking for properties.

The Intermediary Website has a host of commentary from industry professionals if you want a balanced opinion on todays news at Bank of England increases interest rates – The Intermediary – Latest UK mortgage news

And of course, if you want us to take a look at your options (no matter when your deal is up), head over to our contact page and drop us a line : Contact Us

Securing a mortgage while self-employed can be an overwhelming task. Uncertainty over the cost-of-living crisis makes it a challenging environment, so start the new year on the right foot and understand the options available for self-employed clients.

Self-employment in 2023

According to the Office for National Statistics (ONS) self-employment is on the rise, with the new year set to follow this steady growth. Between January and March 2022, self-employment increased to just over 4.2 million.
This number continued to grow through the year, increasing to 4.23 million in October. With numbers projected to gradually increase, now might be a good time to reassess the options available to you.

What is a self-employed mortgage?

The term ‘self-employed mortgage’ implies that there are different deals for the self-employed. In reality, lenders offer a similar choice of mortgages regardless of your employment type, although dependant on your personal circumstances you may be offered a limited range of deals.
Self-employed borrowers can be viewed as more of a liability or risk, since their income isn’t secure. This is one of the reasons why lenders then require further information
in order to prove that you, as a borrower, have a reliable income and can afford the mortgage payments.

What documents do you need?

Lenders will ask for a variety of documents, depending on your self-employed status. These documents could include finalised and certified accounts, HMRC tax year overviews, business bank statements or projected income figures and future plans. Lenders are looking at income and affordability, so whether you are a sole trader, freelancer, limited company or contractor these documents may differ.

Ultimately, mortgage advisers are here to help. Whether you are newly self-employed or have years of experience, there are options out there for you. For more information, Contact Us and we can support you and provide the best outcome for your situation.