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Mortgages Explained: The Different Types of Mortgages

Once you’ve found your dream home, or perhaps you haven’t just yet, you’ll almost certainly need a mortgage to move in. There are many different types of mortgages, but which one should you go for? You want to make sure you’re getting the best rate possible, but you also need to pick a product that suits your personal needs. Maybe you’re a first-time buyer on a super-tight budget, or maybe you want to offset your loan against your savings account? Don’t worry, chances are there’s a mortgage out there with your name on it and Habito will search the whole of the market to help you find it – whatever your circumstances. To get you started, here’s our quick guide to the different types of mortgage available in the UK.


How do mortgages work?

Your mortgage is probably the biggest investment you’ll make, so it’s crucial to understand the basics of how they work. The vast majority are repayment mortgages, where you take out a loan from a bank or building society to help you buy a property. The loan covers a percentage of the purchase price and you have to pay the rest up front (the deposit). You then repay the loan to the lender over a number of years (usually 25), with added interest on top.

As a rule of thumb, if you have a decent deposit to put down (say 10% of the property price) and your income is consistent and well-documented, you should be able to borrow around 4.5 times your gross annual salary. But remember that lenders will also want to examine your outgoings and outstanding debt before giving the green light to any loan. To get a good idea of how much you you can expect to borrow, and from whom, check out Habito’s real-time, whole-of-market mortgage calculator here.


What are the different types of mortgages?

  • Repayment mortgage
  • Interest-only mortgage
  • Fixed rate mortgage
  • Standard variable rate mortgage
  • Tracker mortgage
  • Discounted rate mortgage
  • Capped rate mortgage
  • Cashback mortgage
  • Offset mortgage
  • First-time buyer mortgage
  • Flexible mortgage
  • Buy-to-let mortgage
  • Remortgage

Repayment mortgage

With a repayment mortgage, you steadily pay back the money you’ve borrowed over the length of your mortgage term (the number of years you agreed to pay back your loan to the lender, typically 25). Repayments are made on a monthly basis, with the money split between paying off the interest on the loan and reducing the size of the loan itself. During the first few years, most of the money goes towards paying off the interest, but over time more and more is allocated towards paying off the capital. At the end of the mortgage term, you’ll have paid off the entire loan.

Best for: People who want to be sure they’re going to pay off the whole loan by the end of the mortgage term.


Interest-only mortgage

With an interest-only mortgage, you’re just paying off the interest on your lump sum loan each month rather than eating into the lump sum itself. This means that your monthly repayments are lower, obviously, but you still have to pay back the original loan amount in full at the end of the agreement – so you need to be 100% sure you’re not going to have a shortfall when the time comes to settle up. It’s also worth noting that you’ll pay more interest overall compared to a repayment mortgage as you pay interest on the whole amount for the whole term (with a repayment mortgage, you gradually pay off the loan and interest is only charged on the amount still owed each month).

Best for: People who want low monthly repayments and are 100% sure they’ll have enough money to repay the whole loan at the end of the term.


Fixed rate mortgage

A fixed rate mortgage means the interest rate you pay the lender is guaranteed not to change for a set period of time, usually two to seven years. The major advantage with fixed rate mortgages is that they allow you to work out a precise repayment plan several years ahead when you first take out the loan, which makes this option particularly attractive to first-time buyers on a tight budget. But remember that when the fixed rate period comes to an end, you’ll automatically be switched on to the lender’s higher standard variable rate (see below) unless you remortgage to a new deal.

Best for: People who want an exact idea of what they’re going to have to repay for the next few years.


Standard variable rate mortgage (SVR)

The standard variable rate (SVR) is basically a default, bog-standard interest rate that lenders charge on mortgages, and it rarely makes sense to pay the SVR if you don’t have to – individual lenders are free to set their own SVR and adjust it at their own discretion. One of the few benefits of an SVR mortgage is that there are often no early repayment charges attached if you decide you want to pay off your mortgage early or make an overpayment. Lenders can charge hefty fees for doing this on fixed rate mortgages – something you need to watch out for if you come into a large sum of money, such as a redundancy payout or inheritance, and want to use it to lighten your mortgage load.

Best for: People who want to pay off their mortgage very early.


Tracker mortgage

Tracker rates work by tracking a particular interest rate (usually the Bank of England base rate) as it rises or falls, and adding a fixed amount on top. So, if the base rate is 0.5% and the lender’s add-on rate is 2%, you’ll pay 2.5% interest on your mortgage loan. If the base rate goes up, your payments will go up. And if it goes down? Then your monthly mortgage bill will arrive with an added smile. So it’s not risk-free, but it can be rewarding if interest rates take a tumble. Be warned, though: most experts think rates will rise over the next few years, and you’ll also have to pay early repayment charges if you want to switch and remortgage.

Best for: People who think interest rates will tumble over the next few years.


Discounted rate mortgage

Everyone loves getting money off, of course, and a discounted rate mortgage can be a tempting option. The discount is a reduction on the lender’s SVR for a fixed term, typically two, three or five years. But remember that a fixed term is not the same as a fixed rate. The discounted rate is tied to the SVR, which means it can go up as well as down during the term, and even a 0.25% interest rate rise can bump up your monthly repayments quite significantly. The other thing to note is that discounted rate mortgages often include an early repayment charge if you want to pay the loan off early or remortgage.

Best for: People who want an early-years discount on their mortgage.


Capped rate mortgage

Capped rate mortgages are designed to offer peace of mind against wildly increasing interest rates. How do they do this? By putting a limit (cap) on how high the interest rate can rise and therefore keeping repayments under control, while also allowing customers to benefit if interest rates take a tumble. The major snag is that the standard variable rate offered with capped rate mortgages is usually higher than with a tracker mortgage, so you may well end up paying extra for that added peace of mind.

Best for: People who worry interest rates are going to suddenly shoot up.


Cashback mortgage

The appeal of a cashback mortgage is simple: you sign up to the mortgage agreement and the lender then pays you a cash lump sum upfront, usually advertised as a percentage of the overall loan. It’s a tempting idea to help pay for some of the major costs involved with moving house, but every silver lining has a cloud. Chances are if you don’t need the cash lump sum, you’ll find a better rate elsewhere.

Best for: People who need a cash injection to help with moving home.


Offset mortgage

Offset mortgages link a borrower’s savings account to the balance of their mortgage: every month the lender checks how much you have in your savings account with them and deducts that from the amount you owe on your mortgage, so you only pay mortgage interest on the difference. Let’s say you have a mortgage of £150,000 and savings of £15,000. That month, your mortgage interest would be worked out on £135,000. So it’s quids in for people with plenty of savings and a good way to speed up paying off your mortgage. The downside? The rate probably won’t be the lowest around.

Best for: People with a healthy savings pot.


First-time buyer mortgage

Being a first-time buyer can be daunting: it’s almost certainly the most expensive thing you’ll do in your life and chances are you’ll need a high LTV (loan-to-value) mortgage – the biggest factor when it comes to mortgage rates is the size of your deposit. Fortunately, though, a small deposit doesn’t have to stop you being a homeowner. There are various government schemes to help first-time buyers get on the property ladder. Under the Help to Buy scheme, for example, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit (in London you can borrow up to 40%). But remember you’ll still need a mortgage for the rest of the purchase price and a low deposit will mean a jump in rates. So the more you can put down, the better.

Best for: People who are first-time buyers and only have a tiny deposit.


Flexible mortgage

Flexible mortgages are just that – they give borrowers a little bit of breathing space from time to time. Maybe you want to overpay for a while after getting a wage rise at work, and then you need to underpay for a bit or even take a payment holiday and miss a few monthly payments completely when things aren’t going quite so well. Unsurprisingly, though, the price for all this financial freedom is a relatively high standard rate.

Best for: People who think they might have their fair share of financial ups and downs over the years.


Buy to let mortgage

Buy-to-let mortgages are designed to be used for the purchase of rental property, which means they’re subject to different rules compared to standard mortgages and are usually interest-only. Buy-to-let landlords have been squeezed out of the property market in recent years and seen profit margins slump as measures to free up homes for first-time buyers take effect. So far, these have included a 3% surcharge on stamp duty for buy-to-let purchases and a cut in tax relief for buy-to-let mortgages. But it’s not all doom and gloom: there are still plenty of buy-to-let mortgages out there and we can help you find the best deal to keep your property portfolio thriving.

Best for: People looking to invest in buy-to-let properties.


Remortgage

Remortgaging simply means transferring your loan from the company, bank or building society that originally lent you the money to another (or even to a different deal with the same lender) and cutting your monthly payments or releasing equity in the process. In principle, it’s the same as switching your energy, mobile or broadband provider, only with much bigger returns – homeowners on a standard variable rate mortgage can pay in excess of £4,000 a year more compared to remortgaging to a new fixed rate deal. The process of switching to a new lender is the same as applying for a new mortgage, so you can go directly to the new lender or use a mortgage broker such as Habito, which will act on your behalf. Already have a mortgage through us? We alert our existing customers and help them switch quickly and easily so they can be sure they’ll never pay more than they have to.

Best for: People looking to switch to a better mortgage deal.


Get a mortgage quote today

Whichever type of mortgage you need, or if you’d like to speak more about different types of mortgages with a mortgage expert, start your fee-free application with today here.

Remortgage 101

In this remortgage 101 article, we’re going to focus on everything to do with remortgages and specifically how millions of Britons could save by switching from their lender’s variable rate to a fixed rate.

In this guide you will find out:

  • What is a remortgage?
  • Who should remortgage?
  • Why should I remortgage?
  • When should I switch?
  • How do I remortgage?

What is a remortgage?

When you remortgage, you take out a new mortgage on the property you currently own. This is either to replace the mortgage you currently have, or to borrow money against your property. For most people, remortgaging is usually done when they automatically get moved from their fixed rate (which they have for 2, 3 or 5 years), to their lender’s typically more expensive standard variable rate (SVR).

Who should remortgage?

According to our research almost 2 in 5 (39%) Brits with a mortgage have not changed their product in the last five years, with 13% of these never doing so. Given most people fix for a maximum of 5 years this could be a big drain on household finances. There are estimated to be 4 million households in the UK on their lenders Standard Variable Rate, after their initial rate has expired.

Why should I remortgage?

The UK Average SVR rate is around 4.56% which means most people on pay £427.13 per month. Fixed rate mortgages are much lower – Habito’s remortgage customers average interest rate was 1.79% meaning an average monthly payment of £162.59. This gives the average Habito customer a saving of £264.54 a month, but for many homeowners, this could be even more.

HSBC estimated that homeowners on an SVR could save an average of £4,000 per year by remortgaging to a fixed. Since the Bank of England’s rate rise on  November 2nd the cost of not remortgaging has gone up a further 0.25% or an additional £20 a month on average, per household.

When should I switch?

Firstly, it’s a good idea to find out when your fixed rate finishes.

Most people don’t realise they have been moved on to their lender’s SVR until they check their bank statements and see a hefty increase in monthly mortgage payments. If this is the case with you, your introductory period might be up already. If so, then it’s time to head over to Habito and start the remortgaging process.

If you are still on your lender’s introductory rate, you should start the remortgaging process 3-4 months before it ends.

How do I remortgage?

These are the key things that happen when you find a new mortgage lender through Habito. As well as saving money and time you will:

  • Get your property valued
  • Submit your mortgage offer through Habito
  • Once your case is agreed you will receive a mortgage offer from the lender to confirm you are ready to transfer your mortgage
  • Once that’s done, the solicitor will handle the transfer of deeds from one lender to another and they transfer money and deeds
  • At completion, a letter will be sent through for you to sign
  • Receive a letter from the new lender confirming that your mortgage has been transferred
  • Your new mortgage payment will be taken based on your requested date and account details.

That’s all!

So what are you waiting for?

Watch the short video below to see how Habito works and how we can save you money!

Ready to get a free quote online? Click here to get started.

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Give yourself a Christmas bonus! Switch your mortgage this December

Christmas work bonus culture has all but disappeared in UK, with less than a fifth of UK employers expected to pay staff a Christmas bonus this year. Unfortunately, this traditional winter windfall appears to be a thing of the past for most of us.

As wages continue to be flat and the cost of living rises – homeowners need to source extra income from somewhere other than their employer’s goodwill. And the answer could be closer to home…

What can I do to save money this Christmas?

Our research discovered that remortgaging your home can pay for the cost of Christmas Day – and recover a quarter of the total cost of Christmas. 

According to research from CompareTheMarket, Christmas costs an average of £812 per family, and the average Habito customer who moves from a Standard Variable Rate (SVR) to a Fixed-Rate saves £264.54 on their mortgage per month, or £3,174.48 a year.

The savings in the first month alone would cover the costs of a Christmas tree and decorations (£45), travel to see family and friends (£80) and Christmas dinner (£136). There you have it – the answer’s not just close to home – but at home! The savings you can make through a remortgage from a variable to a fixed-rate mortgage could help you make Christmas free for the family. 

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Despite these results, research by Habito in partnership with YouGov found that almost 2 in 5 (39%) Brits with a mortgage have not changed their product in the last five years, with 13% of these having never done so.

The mortgage loyalty penalty

There are an estimated 4 million households in the UK stuck on their lender’s more-expensive Standard Variable Rate. These homeowners have ended up paying over the odds after their initial fixed-rate period, usually 2 – 5 years, has expired. Since the Bank of England’s November 2nd rate rise, the cost of not remortgaging has gone up a further 0.25% or an additional £20 a month per household on average.

This means that remortgaging before your December monthly mortgage payment could effectively make Christmas day free. A quick chat today with one of our mortgage experts could save you hundreds, and make your Christmas that bit sweeter. 

What Habito says about it

Daniel Hegarty, Habito CEO said:

 “No one should be left paying over the odds on their mortgage, especially at Christmas-time when household budgets are under even more pressure than usual.

Technology has finally come to the mortgage industry to make switching your mortgage as easy and commonplace as switching your utilities or broadband.

As well as a festive bonus, remortgaging can really be the gift that keeps on giving – allowing you to save money each month, adding up to thousands of pounds saved over the course of a year.”

How can I get these festive savings?

If you’re wondering where to start with a remortgage, we have everything you need to know right here. If you’re after a little more information on what a remortgage is, who’s right for a remortgage, and how it works, head over to our dedicated page on Remortgaging.

Want to get your remortgage over and done with? Get started here with a few simple details about yourself, you can have an idea of what your remortgage and savings could look like without any credit checks.

From here, it takes only a moment to create an account. After entering a few more details about yourself, we can get a better understanding of your financial situation and what mortgage might be right for you. This is where our team of experienced mortgage experts steps in to give you friendly, personalised mortgage advice.

They allow you to sit back and focus on what matters most to you  saving time and energy. Our experts will keep you updated throughout the process, and find you the right mortgage in record time. Best of all, this is all free, forever.

So what’s the wait? If you’ve been meaning to remortgage, get it ticked off the to-do list before Christmas, and enjoy your savings with the ones who matter to you most.

types of mortgages

43% of Mortgage Holders Paid More This Week – Did You?


This week sees the first mortgage repayments made by UK consumers under the new Bank of England interest rate of 0.5%. The increase, from 0.25%, was the first rise in over a decade and will mean monthly mortgage payments just got more expensive for 43% of UK mortgage holders.

The rise is set to cost an average household on a variable mortgage an extra £20 a month, which over 12 months amounts to £240 a year – a pretty unwelcome expense coming ahead of Christmas and New Year.

But, if you are on your lender’s standard variable rate, you should be able to switch on to a fixed rate and save thousands in the process (before the rate rise HSBC estimated that by switching to a fixed rate households could save £4,000 a year!).

Here’s our 7 ways to get the best remortgage deal:

  1. Timing is everything

It can take time to switch on to a new mortgage rate so you should start looking roughly 14 weeks to three months before your current rate expires. Planning ahead will save you being automatically transferred onto a more expensive variable rate mortgage. Likewise, if you switch too soon, some mortgage products will include an early repayment charge. This charge can be as much as 5% of your outstanding loan, which can add up to several thousands of pounds. If there is a charge, arrange for the remortgage to start the day after the penalty period ends on your current deal.

  1. Don’t be drawn into the lowest rate

The lowest interest rates and seemingly cheapest deals are used by banks and lenders to market to customers, but they typically have larger fees – some over £1,000, which increase the overall price of the mortgage. It is better to look at the total cost – taking into account any associated fees and special offers, as well as the rate, to get the cheapest deal overall.  

  1. Look out for freebies (and what they really cost)

Many mortgage products now come with free valuations, no legal fees, the promise of cashback and more. But these usually come with higher interest rates – so they could still work out as more expensive overall compared to a product that has a lower rate but higher fees and no free services or cashback rewards. Be savvy and look at the cost of legal fees vs cash-back offers to see which is the bigger incentive. With some cashback products paying as much as £500, you could be better off taking the money and still spending on associated fees.

  1. In this market, don’t be scared to fix

Two-year fixes usually offer the lowest fixed interest rates, but after the bank of England increased its base rate and with more rate rises anticipated in 2018, many people are now looking to lock into the current low fixed rates for longer. Opting for a 5-year fixed rate product could be a good strategy to keep your mortgage payments consistently low and avoid any further rate surprises until 2022!

  1. Hold off on applying for a loan or credit card

Any lender will need to know that you’re sensible with your money and can afford to make repayments on your mortgage. So, in the weeks and months running up to applying to a remortgage, it makes sense to manage any existing debts and hold off applying for extra credit cards or loans, to get the best credit score and unlock the best mortgage deal for your needs.

  1. Beware of the loyalty trap

Rather than staying with your incumbent lender or current bank account provider, it pays to shop around. There are over 80 lenders in the UK and many offer lower rates for new customers than they do for existing customers. If you do find another lender with a better deal, don’t fear the break-up admin. Your new lender will appoint solicitors and talk to the old lender to switch your mortgage for you at no extra cost.

  1. Be smart with your time and your money – use a (free) broker

A broker can help you navigate the mortgage market minefield, make the application for you and chase the lender on your behalf – saving you hours of time and heaps money. Brokers usually charge £200 – £400 in fees, but there are brokers out there, including Habito, that offer their services for free and without the need to take any time off work to meet face to face. Take up the offer of impartial online mortgage advice – it doesn’t need to cost you a thing.

So what are you waiting for?

It’s more important than ever to secure the best deal you possibly can on your mortgage and we have invested in the technology to do it record time and with minimal form filling. Get in touch and let us free you from SVR hell – before December’s mortgage repayment comes out of your current account!

First-Time Buyer Stamp Duty Savings Guide

The big Budget statements have been made, and first-time buyers have been granted stamp duty relief on properties up to £500,000. This is great news for those looking to get on the property ladder, but you might be wondering how the savings stack up compared to previous stamp duty regulations. 

The Big Red Briefcase

Chancellor Philip Hammond announced a raft of changes to the government’s approach, and directed funding at the housing market. This was summed up with his pledge to invest a whopping £44 billion pounds over the next 5 years to stimulate the housing market in Britain.

What is Stamp Duty?

At the centre of the housing budget were changes to stamp duty for first-time buyers. Stamp duty, known as Stamp Duty Land Tax by the government, is a form of tax paid when purchasing land or property. Previously, all purchases of primary property were subject to tax on the value of the property that fell into each tax band. Stamp duty is payable within 30 days of the completion of the sale, and paid to HMRC.

What does this mean for me?

The new changes mean first-time buyers will not pay any stamp duty on properties up to £300,000. This is fantastic news for first-time buyers, who on average spend £207,693 on their first home. This means the majority of first-time buyers won’t pay a penny of stamp duty on their first home, saving an average of £1,650.

For first-time buyers in London, this stamp duty change will also provide relief, where the average first-time buyer spends £410,000 on their property. The new stamp duty relief covers properties up to £500,000, meaning first-time buyers will only pay stamp duty on the £300,000 -£500,000 portion of the property. This means those buying a property at £410,000 will pay £5,500 in stamp duty, saving £5,000 in comparison to the previous regulations.

Check out our Habito Stamp Duty Index to see the effect of the new regulations on the cost of homes for first-time buyers:

Who should I speak to?

With relief on stamp duty, and more first-time buyer products on offer, now’s the time for those looking to get on the property ladder to make a move. Habito is here to help you every step of the way, with a team of friendly mortgage experts on hand to answer any first-time buyer questions you might have, and guide you through your application.

The first step is using our clever Mortgage Illustrator, which can give you an idea of how much you could expect to borrow, including which mortgage product might be right for you, in a matter of minutes. All it takes is some simple information about yourself, without any credit checks, to get a picture of what your mortgage might look like.

From there, our mortgage experts can advise you on products and rates, and help secure the best possible deal for you. Head over to Habito now to find out if you could be in with the chance of saving on your first home, and let us help you find mortgage harmony.

Credit to Stefan Rousseau - WPA Pool/Getty Images

Stamp Duty Abolished For First Time Buyers

 

After weeks of speculation about the Autumn Budget, the fiscal facts are finally on the table. Philip Hammond has just finished laying out his plans to the House of Commons, and here at Habito we’ve been keeping a very close eye on the action. All in all, the Chancellor’s Budget speech paints a hugely positive picture if you’re looking to buy your first home. Read on and find out why.

Massive savings on stamp duty

Thanks to rocketing property prices, particularly in London and the South-East, stamp duty has been raking in massive revenues for the government but also helping to stall the UK housing market. The proportion of first-time buyers liable for the tax has risen from 47% in 2001 to a whopping 78% in 2017 – and that figure jumps to 100% in London. As a result, first-time house-hunters have been shying away from getting on the property ladder and empty-nesters have been staying put instead of downsizing to free up family homes.

What has the Chancellor promised?

The Chancellor has come up with a surprisingly sweet carrot to get young people to swap ‘Generation Rent’ for ‘Generation Own’. He has announced that, from today, first-time buyers will pay zero stamp duty on properties up to £300,000. For homes between £300k and £500k, first-time buyers will save £5,000 in stamp duty.

Pre-Budget, properties under £125,000 were exempt, but the average purchase price among first-time buyers in the UK stands at £207,693 – and £410,000 in London. So, the £1,700 you would have to stump in stamp duty on your £210,000 dream home will now be absolutely nothing! Good news for Londoners, who will save £5,000 in tax on a £410,000 home, paying just £5,500 in stamp duty. The new rules mean a stamp duty cut for 95% of first-time buyers, with 80% paying no stamp duty at all.

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More land for new homes

The UK is in the middle of a housing crisis, with a chronic shortage of new homes being built each year, and Communities Secretary Sajid Javid piled on the pre-Budget pressure for the Chancellor to ‘think big’ and ring-fence £50 billion of public money for new homes. The benefits of getting Britain building again are clear – an influx of new homes would help to ease the housing crisis and rein in spiraling property price increases, allowing more first-time buyers to get a foot on the property ladder.

What has the Chancellor promised?

Mr Javid’s pleas have been answered by the Chancellor, who has committed £44 billion to provide funding, loans and guarantees over the next five years to boost the UK’s housing stock. He told Parliament that the crisis needed ‘money, planning reform and intervention’, so how will the £44 billion figure break down? Money to deliver 300,000 new homes each year by the mid-2020s (up from the current 217,000), training young construction workers and guaranteeing loans for small house-builders to get their hard hats on pronto. The Chancellor also announced planning reform to free up more urban brownfield sites for residential development, and intervention on the vast number of planning permissions currently left unbuilt. But one thing not to expect is flats in fields – the Green Belt will remain gloriously green.

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Help to Buy scheme extended

Aimed at young house-hunters, Help to Buy launched in 2013 and allows you to buy a new-build property with just a 5% deposit – the government lends 20% of the sale price and you borrow the rest via a repayment mortgage. The scheme has been hugely popular and already accounts for more than a quarter of all new-build sales in the UK, 81% of which are to first-time buyers.

What has the Chancellor promised?

The Tories are targeting the young vote, and Theresa May already used the Tory Party conference in October to announce a government injection of a further £10 billion into the Help to Buy scheme, allowing another 135,000 people to buy a new-build home by 2021. The Chancellor used his Budget speech to reconfirm that figure – but where all that extra money’s going to come from is yet to be revealed.
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Habito’s point of view

The Chancellor’s pre-Budget intentions were clear: “We will not allow the current young generation to be the first since the Black Death not to be more prosperous than its parents’ generation. Fixing the housing market is a crucial part of making sure that doesn’t happen.” Strong words indeed, and Philip Hammond has followed through with a wide range of homebuyer reforms that mean it’s a brilliant time to put your foot on the property ladder. Stamp duty cuts, new-build investment and a boost for Help to Buy will all help the housing market back to good health.

Kala, our VP Operations, recommends you chat to our friendly team of mortgage experts sooner rather than later:

Today’s stamp duty reforms will turbocharge the first-time buyer market, allowing people to save thousands and put more money towards a deposit, giving them access to a wider range of mortgages. However, it is also likely that house prices will rise, as there could be a rush to take advantage of this tax change on houses below the £500,000 threshold.

The number of properties bought and sold from now until January is usually low. But with the increase to the base interest rate by the Bank of England this month, as well as continued competitive prices on offer from mortgage lenders, it’s likely we’ll see a boost in house buying, based on first-time buyers rushing to take advantage of this change to stamp duty.”

So stop dreaming and start doing your sums, and hop on to live chat to speak to one of our mortgage experts. Habito is here to help you every step of the way towards mortgage bliss, and there’s no better time to start your journey with us!

Learn more about Habito & find out how much you can borrow online today →

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What is a mortgage broker?

What is a mortgage broker?

A mortgage broker is an intermediary, linking the borrower like you, to a lender, which is usually a bank or building society. Your mortgage broker manages the application on your behalf, researching products, dealing with lenders, and taking the burden off of you.

What are the benefits of using a mortgage broker?

A mortgage broker is in the simplest terms a middleman – using their expertise and resources to take the heavy lifting out of your mortgage application. There are several benefits to using a mortgage broker, not limited to making your life easier when looking for a mortgage. Applying for a mortgage is a timely, complicated and often drawn out procedure, and by handing over your application to a broker, you can remove a lot of the stress of applying for a mortgage.

– Time 

You can save heaps of time when using a broker to apply for your mortgage. Between researching products, filling in forms and chasing lenders, mortgage applications are by no means speedy. By letting a broker manage your mortgage application, you can free up time to focus on what matters most to you. Buying or moving home can be a challenging experience, so any free time you can claw back is always a positive

– Money

There are over 20,000 mortgage products currently on the market, so choosing the best value mortgage can be tricky without the help of a mortgage broker. Our clever technology scans the market, using your personalised details, to find the right product for you. This means you can rest assured you have the best possible value mortgage, and avoid overpaying on pricey products. Habito is completely free, as we charge the lender not the borrower, which means you can save money on costly broker fees and still find a great mortgage.

– Avoid overpaying in the future

When you take out a new mortgage, you are usually offered a discounted rate for a set number of years, known as your introductory period. This is usually for 2, 3 or 5 years, and the interest rate is fixed. Following this, you will be transferred to your lenders more expensive Standard Variable Rate (SVR), which is often several percent greater interest than your introductory rate. This can lead to an increase in monthly payments by hundreds of pounds, which nobody wants.

When you complete your mortgage with Habito, we’ll keep a close eye on your introductory period, and when it’s time to switch, we’ll do it for you. This means you never end up overpaying, and can rest assured Habito have your back. We are changing the way mortgage brokers work, and want to reflect the commitment people make when choosing to take out a mortgage.

Pairing people and products

We take your personal circumstances into account to help you find the right mortgage. This means understanding your employment situation, income, debt and life events. We use this information to give you an idea of what mortgage you could get. We call this our Habito Mortgage Illustration. It’s a detailed breakdown of the mortgage product you could expect to be offered sourced from actual products. This illustration includes monthly payments, interest rates, LTV ratios and which lender is offering the deal. It also has an adjustment function which allows you to see the effect changing the deposit or borrowing amount has on interest rates. Most high street brokers would require you to come in for an appointment for a similar mortgage snapshot, buthere at Habito we believe we can move this all online and create an even better service. 

Expert advice

Once you’ve got your personal mortgage illustration, the next step is expert advice. Our team of mortgage experts are available for calls and web-chats 7 days a week as follows:

Monday – Wednesday: 9am – 9pm
Thursday and Friday: 9am – 5pm
Saturday and Sunday: 12pm – 5pm

The mortgage expert team will answer any questions you might have, and guide you through your application. You’ll be able to see the progress of your application on your dashboard and keep up to date with what’s happening.

So what’s the wait? Get speaking to one of our mortgage experts now and find out how much you could afford to borrow or save on your current mortgage, and take control of your mortgage once and for all.

 

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