The COVID-19 pandemic has led to a reduction in the availability of high loan-to-value (LTV) mortgage products, particularly for prospective homebuyers with only a 5% deposit. This has left many hard-working households unable to get onto the housing ladder. In today’s Budget the government has therefore announced a mortgage guarantee scheme to support a new generation in realising the dream of home ownership.

It will give buyers – both first-time and existing – the option to put down a 5 per cent deposit on a home with a value of up to £600,000.

The First Home Fund is a £200 million shared equity pilot scheme to provide first-time buyers with up to £25,000 to help them buy a home.

It is open to all first-time buyers in Scotland and can be used to help buy both new build and existing properties.

Is Now the Time to Switch Mortgage?

If your mortgage is currently on your lenders’ standard variable rate, you could be potentially paying over the odds on your mortgage. A report from HSBC stated if those on the standard variable rate switched their mortgage, they could be saving up to £4,000 each per year [1].

With the Bank of England base rate currently at 0.1% [2], now could be a good time to lock in a new mortgage rate.

The Bank of England has recently written to all banks and building societies to check whether they could pass on negative interest rates if the bank cut the current base rate of 0.1%.

According to the chairman of Natwest Howard Davies, Britain’s banks are not ready for negative interest rates, with technical and contractual issues aplenty.

The Financial Conduct Authority (FCA) has stated that COVID mortgage payment holidays in the UK will not extend past the 31 October 2020 and any financial support past that point will be marked on credit files.

The FCA has emphasised that both a payment holiday and partial payment holiday are temporary, and the outstanding amount will need to be paid back at a later date. Interest will also continue to build during this time and repayments may be higher after the payment holiday according to the FCA.

For Scotland, a cut to the Land and Buildings Transaction Tax will be introduced from Wednesday 15th July, remaining in place until 31st March 2021.

The changes will mean that the starting point for paying the LBTT on house purchases will rise from £145,000 to £250,000.

The Scottish Government has launched a pilot scheme called First Home Fund. The scheme is to help first-time buyers with the cost of purchasing a home in Scotland.

The scheme will contribute up to £25,000 towards the cost of buying a property through a shared equity scheme.

With the summer months long gone and the festive month(s) nearing, now is a good time to look at your mortgage.

If you haven’t looked at your mortgage for a while, you could be paying more than you should on your mortgage. This could because you have been transferred over to your lender’s standard variable rate (SVR). A lender normally transfers you onto their standard variable rate when your fixed rate comes to an end. Allowing your mortgage to revert to the SVR can cost you dearly, as lenders typically hold their SVR at a significantly higher rate. Recent research from Which? states that UK homeowners are spending £4,000 too much on their mortgages each year [1].

If you’re a first-time buyer looking to buy a home this year, read on for our four top tips to secure your first mortgage.

1. Save deposit

You won’t get anywhere on the property ladder with out money for a deposit.

Buying your first home is an exciting time, but it can take a while to build up enough savings so that you can put down a deposit. We’ve compiled a list of 9 money saving tips you can use to work towards saving for your first-time buyer mortgage.

1. Make a shopping list

Plan your week’s meals at the start of each week. Buy what you need at the shops. Remove the need to go to the shops everyday & the temptation of buying expensive takeaway food.

With 2019 well and truly here, getting in shape is one of the top new year’s resolutions. But you shouldn’t just focus on physically and mentally getting in shape – let’s look at financially as well. Here are our top 3 financial jobs you shouldn’t put off in 2019.

1. Remortgaging

In August 2018, the Bank of England increased the base rate from 0.5% to 0.75%*. It’s highest level since March 2009. With this increase, mortgage lenders have started increasing many of the lower rates that many contractor borrowers have been enjoying. By reviewing your mortgage, you could secure your mortgage onto a new competitive fixed rate while they still exist (2, 5 or even some 10-year fixed rates are available). Lifetime Planning can search for remortgage deals on your behalf with major high street lenders and have access to exclusive deals that aren’t available on the high street.

Today, the Bank of England has increased the base rate from 0.5% to 0.75%. This is only the second time in a decade they have increased the rates and it is the highest level since March 2009.

What does an interest rate rise mean for your mortgage?

• More than 3.5 million residential mortgages are on a variable or tracker rate.
• The average standard variable rate mortgage is 4.72%.
• On a £150,000 variable mortgage, a rise to 0.75% is likely to increase the annual cost by £224.

Sources: BBC, UK Finance, Moneyfacts, Nationwide Building Society, August 2018

Our 10 Step Guide to Arranging a Mortgage

The first step on the property ladder is always the hardest. The thought of getting a mortgage is daunting - Where do I begin? Who do I contact first? Shall I start house hunting first?

So to answer all your questions, we've put together a quick 10 step infographic to getting a mortgage.

Our 5 Step Guide To Reviewing Your Mortgage

Could you save money on your monthly mortgage payments? Check out our handy 5 Step Guide to Remortgaging.

Arranging your mortgage and buying a new property is an exciting time. However, the jargon that is used throughout the process can be confusing. We’ve put together a jargon buster to help you along the way during your house buying process. 

1. Agreement in Principle

This is the agreement provided by the mortgage lender which states the amount they are prepared to lend to you subject to a full mortgage application with supporting documentation and their enquiries during underwriting being satisfied. It’s useful if you haven’t found a property to buy but would like to know how much you could potentially borrow.

What would an increase in interest rate mean for your mortgage?

The Bank of England has announced that it is keeping interest rates at 0.5% but has also hinted at increasing the base rate soon [1].

They did say rates would need to rise “earlier” and by a “somewhat greater extend” than they thought at their last review in November.

3 Times When to Switch Your Mortgage

Remortgaging is all about switching your mortgage without the hassle of moving to a new house. There are key times to do this. You don’t have to stay with the same lender for the duration of your mortgage, but don’t just switch mortgage to free up extra cash for holidays. Instead make an informed decision where the advantage is in your corner. Such as the following…

1. When rates are low