Mortgage Repayments Set To Fall By A Quarter

January 23, 2023

Mortgage holders can finally have some good news to look forward to this year, according to wealth management company Quilter. Their experts are predicting that the average monthly mortgage repayments will fall by as much as 25% by the end of 2023, providing some relief for squeezed household budgets.

According to a report in the Financial Times, a combination of falling inflation and interest rates will lead to lower mortgage rates. Furthermore, average house prices are set to fall across the UK, making new mortgages more affordable for first time buyers.

Quilter mortgage expert Karen Noye commented: “Rising mortgage rates have played a significant role in the affordability of buying a first home or moving home, and for many these costs were pushed to unaffordable highs.”

She added: “It is therefore a real positive that looking forward we can hope to see such a significant dip in monthly mortgage payments by the end of the year should house prices and mortgage rates continue to fall as expected. On a regional basis, some have been hit much harder by rising house prices and subsequent mortgage costs than others.”

“The North West of England has seen the most significant rise in monthly payments, while those in London have seen the smallest rise in terms of percentage increase, but are still left paying huge mortgage bills as the costs were already so high.”

House prices have been artificially inflated over the past two years, as the stamp duty holiday and lifestyle reassessments during the pandemic fuelled unprecedented property market activity. Estimates vary about how much prices might fall during 2023, with mortgage lender Halifax predicting a drop of 8%.

This will be welcome news for first time buyers, especially those with less than perfect credit records who may be concerned about whether they will be eligible for a mortgage deal. Anyone in this position is advised to contact a specialist bad credit mortgage broker, who will be well placed to help them find the most suitable mortgage deal.

Your credit record is a history of your past financial performance over the last six years, and it takes into account any late or missed payments on loans or credit cards, how much of your available credit you are currently using, and more serious issues such as County Court Judgements or bankruptcies.

It is still possible in many cases to find a mortgage deal even with a low credit score, but it is important to know which lenders to approach. Most high street lenders will be very wary of any issues, particularly at a time when the economy is weak.

Rejected mortgage applications can damage your credit score further, so that’s why it is important to seek the right advice.

Your home may be repossessed if you do not keep up with your mortgage repayments.

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