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The Smartest Move You’re Not Making on Your Mortgage · Merryn Talks Money

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  Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Hello listeners, Meren zumazepwbare.
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  Speaker 1: Right onto this week's show, Welcome to Maren Talks Your Money,
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  Speaker 1: the personal finance edition of Meren Talks Money. In these
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  Speaker 1: blonus podcasts, we talk about the best strategies for making
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  Speaker 1: the most of you all money. I am Maren sumset
• 1:01
  Speaker 1: Web and with me as ever senior reporter and Money
• 1:04
  Speaker 1: to Suld author John Steback Hi John, hi elm Right,
• 1:11
  Speaker 1: we are onto one of our favorite topics. Well it
• 1:15
  Speaker 1: really house prices is our favorite topic, but we're actually
• 1:17
  Speaker 1: going to revisit mortgages, which is connected to our favorite topic,
• 1:20
  Speaker 1: and of course, dear to all of our hearts for
• 1:22
  Speaker 1: those of you who are new to the show, last
• 1:24
  Speaker 1: bring we published an eight part series on how to
• 1:26
  Speaker 1: buy a house in the UK, which I strongly recommend,
• 1:29
  Speaker 1: by the way, But since then, the landscape for interest
• 1:32
  Speaker 1: rates in particular has changed drastically, so we thought it
• 1:35
  Speaker 1: was worth revisiting this topic and looking questions like what
• 1:38
  Speaker 1: is the best type to get now, who has the
• 1:40
  Speaker 1: best rate, what's most important when trying to choose the
• 1:42
  Speaker 1: best mortgage for you? And of course also is now
• 1:45
  Speaker 1: really the best time to buy a house at all?
• 1:47
  Speaker 1: To help us for that, we welcome back to the
• 1:49
  Speaker 1: show Anthony Emerson, Director at Trinity Financial.
• 1:52
  Speaker 2: Hello Anthony, Hi Maren, how are you good?
• 1:55
  Speaker 1: Thank you and thank you for joining us again. We
• 1:57
  Speaker 1: really appreciate it. Now you've already heard me say the
• 1:59
  Speaker 1: question is then going to ask you, so why don't
• 2:01
  Speaker 1: we just start? The landscape is saying a lot since
• 2:03
  Speaker 1: we last saw you, last spoke to you do, run
• 2:06
  Speaker 1: us through what's been happening.
• 2:08
  Speaker 2: The landscape has changed dramatically. I mean, last time we spoke,
• 2:12
  Speaker 2: we were on a journey where we were expecting one,
• 2:15
  Speaker 2: maybe two Bank of England based rate cuts. The inflation
• 2:19
  Speaker 2: looked like it was a little bit more in control,
• 2:22
  Speaker 2: and then it's flipped entirely on its head and we
• 2:26
  Speaker 2: are now in a position where the Iran war has
• 2:29
  Speaker 2: created an immediate surge in the interest rates that are
• 2:33
  Speaker 2: available to clients. We saw within a two week period
• 2:37
  Speaker 2: and increase of around about one point two percent in
• 2:41
  Speaker 2: the cost of borrowing, which is exactly the opposite of
• 2:44
  Speaker 2: what we were hoping for.
• 2:45
  Speaker 1: Yeah, one points so up from what was it before.
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  Speaker 1: What was the sort of classic two effects before the
• 2:52
  Speaker 1: war began.
• 2:53
  Speaker 2: The lowest rates are available at the point where the
• 2:56
  Speaker 2: war started was around about three point six, and then
• 2:59
  Speaker 2: that jumped up to four point seven as the sort
• 3:03
  Speaker 2: of best rate option that was about available, and that
• 3:06
  Speaker 2: was we're a stonkingly high forty percent deposit.
• 3:10
  Speaker 1: Wow, if we went out today with say a classic
• 3:13
  Speaker 1: ten percent deposit looking for two year effects, what would
• 3:17
  Speaker 1: we end up.
• 3:17
  Speaker 2: Paying at the moment just short of five percent? And
• 3:21
  Speaker 2: that I mean the interest rates went up by sort
• 3:23
  Speaker 2: of one point two where everything was in excessive five percent.
• 3:27
  Speaker 2: But since then we've seen a little bit of a
• 3:29
  Speaker 2: softening as the swap rates have edged downwards a little bit,
• 3:33
  Speaker 2: and I think the uncertainty caused lenders to over compensate
• 3:39
  Speaker 2: for the uncertainty. And then as things have sort of
• 3:42
  Speaker 2: panned out and they've got more of an idea of
• 3:44
  Speaker 2: how it's going to affect, we've had the rates come
• 3:47
  Speaker 2: down a little bit, run about sort of point two
• 3:49
  Speaker 2: of a percent, So we still that one percent higher.
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  Speaker 2: The lenders, bless them, are doing absolutely everything they can
• 3:57
  Speaker 2: to try and get us into the properties that we on.
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  Speaker 2: I mean, we've seen more and more lenders these days
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  Speaker 2: change their affordability calculations. So we've now got more lenders
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  Speaker 2: lending five and a half times your income, even up
• 4:11
  Speaker 2: to six times your income for certain people. And you know,
• 4:15
  Speaker 2: we have really reached that inflection point still where that
• 4:19
  Speaker 2: whole debate about rental versus owning on a month to
• 4:23
  Speaker 2: month cost basis, as if you're young, then you've got
• 4:26
  Speaker 2: a deposit, it probably makes sense for you still to
• 4:29
  Speaker 2: buy a house than it is for you to rent
• 4:31
  Speaker 2: really it is.
• 4:33
  Speaker 1: Yeah, and it's not getting a little closer with these prices.
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  Speaker 1: I mean, I always think when you see when you
• 4:38
  Speaker 1: see a lender prepared to offer six times income in
• 4:42
  Speaker 1: a in a dodgy economy with very low growth in
• 4:46
  Speaker 1: rail wages, particularly in the private sector, it makes me
• 4:49
  Speaker 1: feel nervous that maybe they've relaxed those affordability measures a
• 4:52
  Speaker 1: little too much.
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  Speaker 2: I can totally see where you're coming from on that.
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  Speaker 2: But the problem is the Renters Reform Act has also
• 4:59
  Speaker 2: kicked now, which is meaning that we've got more and
• 5:02
  Speaker 2: more landlords leaving the sector, and that means that we're
• 5:08
  Speaker 2: going to have less rental properties available, which is going
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  Speaker 2: to drive the prices up. It's going to have completely
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  Speaker 2: the opposite sort of effect that maybe the government wanted,
• 5:20
  Speaker 2: but it is definitely going to mean that renting is
• 5:24
  Speaker 2: going to get more and more expensive as we move forward.
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  Speaker 1: Interesting, so you'd expect buying to become more affordable, prices
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  Speaker 1: to come down, and we're seen suddenly at a collapse
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  Speaker 1: in house price growth and we're seeing falls in absolute
• 5:35
  Speaker 1: nominal terms in quite a lot of areas now, particularly
• 5:38
  Speaker 1: in London, and you'd expect that to continue partly as
• 5:41
  Speaker 1: a result of this rental reform, I think so.
• 5:44
  Speaker 2: I mean we're seeing that flats in particular, which were
• 5:48
  Speaker 2: the vast majority of the rental stock, a lot more
• 5:52
  Speaker 2: stock is on the market and therefore those prices are
• 5:55
  Speaker 2: being pushed downwards because of the supply and demand imbalance.
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  Speaker 2: You can probably pick up a fairly decent deal in
• 6:03
  Speaker 2: the rental in a flat market at the moment, then
• 6:06
  Speaker 2: you could maybe compared to a year or two ago.
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  Speaker 2: That means that obviously, if you are a starter, first
• 6:15
  Speaker 2: time buyer, there is probably a couple of good deals
• 6:17
  Speaker 2: out there which will make sense. And obviously the bigger
• 6:20
  Speaker 2: the deposit you've got. You know, we're looking at rental properties.
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  Speaker 2: If you bought something at circus six hundred odd thousand
• 6:28
  Speaker 2: pounds and you were, you know, in your early thirties,
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  Speaker 2: you could probably get a mortgage costing year round about
• 6:34
  Speaker 2: two and a half thousand pounds on a capital repayment basis,
• 6:37
  Speaker 2: even at ninety percent lines of value. Now those sorts
• 6:41
  Speaker 2: of properties from what we've seen, are renting for around
• 6:44
  Speaker 2: about two and a half thousand pounds, so it's quite equitable,
• 6:47
  Speaker 2: but obviously in your in your capital repayment mortgage, there
• 6:51
  Speaker 2: is an element of capital repayment which you are getting
• 6:53
  Speaker 2: back over the course of time.
• 6:55
  Speaker 1: Yeah, so that that whole thing can still work. So
• 6:58
  Speaker 1: do you think that rates have settled for now?
• 7:01
  Speaker 2: Who knows at the moment. You know, we've had We've
• 7:05
  Speaker 2: had a couple of lenders just this morning saying that
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  Speaker 2: they're reducing their rates. But when I say reducing their
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  Speaker 2: only coming down by zero point zero five of a percent,
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  Speaker 2: So it's very very nominal. We are very nervous about
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  Speaker 2: the fact that inflation is a sort of rear wood
• 7:26
  Speaker 2: looking metric, and we are yet to see the full
• 7:31
  Speaker 2: effect of inflation and the pressures that that puts on
• 7:34
  Speaker 2: everything else come through in the figures. So we think that,
• 7:42
  Speaker 2: you know, the cost of fuel, fertilasa and all the
• 7:45
  Speaker 2: other bits and pieces is really going to come to
• 7:49
  Speaker 2: the foe in the next couple of months, and you
• 7:52
  Speaker 2: might see rates remain at this sort of level for
• 7:55
  Speaker 2: a while while they wait for more data to come through.
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  Speaker 1: Okay, I'm nice. Pose it the question that I know
• 8:01
  Speaker 1: that everyone wants to ask, And if I hadn't interrupted John,
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  Speaker 1: I think he might have been about to ask it. Sorry,
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  Speaker 1: John is if you need to remortgage in the near future,
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  Speaker 1: do you do it now or do you wait? And
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  Speaker 1: from what you've just said, it rather sound to me
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  Speaker 1: like you would say do it now because these inflationary
• 8:17
  Speaker 1: infacts are still to come.
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  Speaker 2: We have this conversation with people all the time where
• 8:21
  Speaker 2: they think that you need to wait to be able
• 8:24
  Speaker 2: to secure something. You can remortgage your property if you're
• 8:27
  Speaker 2: up for remortgage up to six months early earlier than
• 8:32
  Speaker 2: your expiry dates of your current product. If the rates
• 8:35
  Speaker 2: improve from that point going forward, you can always ditch
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  Speaker 2: the application that you've made, either with your existing lender
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  Speaker 2: or with a new provider, and then reapply for a
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  Speaker 2: new rate or new products, or whatever it might be
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  Speaker 2: going forward. I'd much rather clients are prepared and get
• 8:54
  Speaker 2: their mortgage set and settled six months ahead of time,
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  Speaker 2: and then every month catch up with their mortgage broke
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  Speaker 2: just kind of say, let's have a look at the
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  Speaker 2: market again. Has it improved? Should we make another application
• 9:05
  Speaker 2: for something cheaper? Too many people are leaving it right
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  Speaker 2: to the last minute, and if something goes against them,
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  Speaker 2: they may very well end up paying quite a bit
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  Speaker 2: more than they had to.
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  Speaker 1: I haven't realized you could do that kind of rolling rearranging.
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  Speaker 3: How do you, John, I was aware of that. I'd
• 9:21
  Speaker 3: just would like to just double check. Are they don't
• 9:24
  Speaker 3: say to that Antony late. For example, you don't have
• 9:27
  Speaker 3: to pee the arrangement fee up front. There's no sort
• 9:30
  Speaker 3: of non refundable costs involved.
• 9:33
  Speaker 2: Generally speaking, John, you have lenders providing you with free
• 9:36
  Speaker 2: valuation and free legal transfer nowadays, and because of that,
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  Speaker 2: we can secure something with no money down. The arrangement
• 9:45
  Speaker 2: fee varies from product to product, from free to fifteen
• 9:49
  Speaker 2: hundred two hundred to fifteen hundred to two thousand pounds
• 9:52
  Speaker 2: for each product, but you can opt to add them
• 9:56
  Speaker 2: to the loan at the end when the mortgage comp
• 10:01
  Speaker 2: So therefore there's no money down from your side to
• 10:04
  Speaker 2: be able to get in and do that application. And
• 10:08
  Speaker 2: at least you have something in your back pocket which
• 10:11
  Speaker 2: basically allows you to protect yourself from any upward increase
• 10:15
  Speaker 2: in rates.
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  Speaker 3: Yes, so basically you should definitely do it, But there's
• 10:20
  Speaker 3: no down't say to.
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  Speaker 2: This, absolutely no downside other than the poor mortgage broker
• 10:24
  Speaker 2: might need to do his job two three, four times over.
• 10:28
  Speaker 1: What about if you're what about if you're buying, you're
• 10:29
  Speaker 1: taking on a new mortgage, and you say you say
• 10:32
  Speaker 1: you're looking for a house right now, can you do
• 10:34
  Speaker 1: the same kind of thing thing, Well, I haven't found
• 10:35
  Speaker 1: a flat yet, but I'm definitely going to find one.
• 10:37
  Speaker 1: Can I arrange a mortgage and then keep rolling that
• 10:43
  Speaker 1: over or I can't arrange the mortgage until I've actually
• 10:45
  Speaker 1: found the house.
• 10:47
  Speaker 2: You have to have found a property first in order
• 10:50
  Speaker 2: to make a full mortgage application, and at that point
• 10:53
  Speaker 2: the mortgage offer comes out, and as long as you
• 10:56
  Speaker 2: haven't yet exchanged, we can keep reviewing the rate and
• 11:00
  Speaker 2: change in the application accordingly. So if you took out
• 11:04
  Speaker 2: a mortgage application with San Sander, for example, and you
• 11:08
  Speaker 2: know the rate went from four point seven to four
• 11:10
  Speaker 2: point five, we could ring San Sander up, get a
• 11:14
  Speaker 2: new mortgage offer issued, and they would issue a new
• 11:17
  Speaker 2: mortgage offer at the lower interest rate. The reason that
• 11:20
  Speaker 2: we say that you can do it up to the
• 11:21
  Speaker 2: points of exchange is that once you've exchanged contracts, because
• 11:25
  Speaker 2: you have to complete on a set day and a
• 11:27
  Speaker 2: set timeline, it's very risky to go back to the
• 11:31
  Speaker 2: bank and ask for a change to be made, because
• 11:33
  Speaker 2: the bank has the right to reassess the entire loan
• 11:37
  Speaker 2: under whatever their new basis is. So affordability might have
• 11:42
  Speaker 2: slightly changed, the kind of property that you're after might
• 11:45
  Speaker 2: have slightly changed, so there is a risk that the
• 11:47
  Speaker 2: lender might pull the product at that point. However, generally speaking,
• 11:52
  Speaker 2: it doesn't affect the client's application. Okay.
• 11:56
  Speaker 1: So, given the length of time there often is between
• 11:58
  Speaker 1: an offer being accepted and exchange, it's worth getting your
• 12:02
  Speaker 1: mortgage offer in as quickly as possible because it gives
• 12:04
  Speaker 1: you there's great optionality and that if rates go up,
• 12:07
  Speaker 1: not your problem. If rates go down, you can reallygotiate.
• 12:12
  Speaker 2: Absolutely. That's one hundred percent correct, Okay. Interesting, and I
• 12:17
  Speaker 2: think too many people, especially when it comes to remortgaging,
• 12:20
  Speaker 2: don't really know that fact, and you know, they wait
• 12:23
  Speaker 2: and wait and wait hoping for a better situation. Whereas
• 12:29
  Speaker 2: you can do it as early as you want and
• 12:32
  Speaker 2: then just review and review and review every month for
• 12:35
  Speaker 2: the next five or six months. We can get a
• 12:38
  Speaker 2: change of products up until the mid of the month
• 12:41
  Speaker 2: before your rate expires. So if your rate expires in June,
• 12:46
  Speaker 2: we can get you know, a change in product up
• 12:49
  Speaker 2: to the fifteenth To make.
• 12:51
  Speaker 1: Interesting because I've been noticing that deals are taking longer
• 12:55
  Speaker 1: and longer to go through than they were even a
• 12:58
  Speaker 1: year ago because of Chain's collapse, saying in a very
• 13:00
  Speaker 1: sort of olden datish type of way. So if you
• 13:03
  Speaker 1: have that length, this is really useful information.
• 13:06
  Speaker 2: That's on the purchase side of things, absolutely, you know purchases.
• 13:12
  Speaker 2: The whole system and the way it works is somewhat archaic,
• 13:16
  Speaker 2: but I don't really see it changing. We used to
• 13:18
  Speaker 2: have the you know, the implementation of that Buyer's pack,
• 13:22
  Speaker 2: which I thought would actually revolutionize things in a very
• 13:27
  Speaker 2: positive way. Scotland manages to get everything sorted out before
• 13:31
  Speaker 2: they put their house on the market. Can't really understand
• 13:35
  Speaker 2: why England hasn't followed suits. You go to other parts
• 13:38
  Speaker 2: of the world twenty eight days from the day you accept.
• 13:42
  Speaker 2: After seven days it goes unconditional and away you go.
• 13:46
  Speaker 2: So it's just a different way of looking at it.
• 13:48
  Speaker 2: But change is something that most people don't like.
• 13:54
  Speaker 3: Well, one thing I was going to ask, and I
• 13:56
  Speaker 3: think this is something a lot of people will be
• 13:57
  Speaker 3: curious about. So obviously the fixtureet has shot up to
• 14:02
  Speaker 3: about four and a half four point seven, four point
• 14:05
  Speaker 3: eight percent you can still get a tracker THET four
• 14:09
  Speaker 3: ish four point one. Are you seeing people asking you
• 14:13
  Speaker 3: for trackers? And what's your general teake on that.
• 14:17
  Speaker 2: The tracker differentiation? I mean I looked at interest rates
• 14:21
  Speaker 2: in preparation for this at sixty percent loan to value.
• 14:24
  Speaker 2: For example, the track RADS currently is three point nine six,
• 14:29
  Speaker 2: whereas the same product fixed rate is four point four
• 14:33
  Speaker 2: to two, So you're looking at nearly half a percent
• 14:36
  Speaker 2: difference between the two products. Now that means that you
• 14:42
  Speaker 2: could probably take two Bank of England based rate increases
• 14:46
  Speaker 2: before you reached the situation where your fixed rate would
• 14:50
  Speaker 2: put you. Most of the truckers as well don't seem
• 14:53
  Speaker 2: to have early repayment charges applicable to them, so it
• 14:57
  Speaker 2: gives you more freedom to be able to make over
• 15:00
  Speaker 2: payments refinance at a stage that the market may have improved.
• 15:05
  Speaker 2: And it really just comes down to what you as
• 15:09
  Speaker 2: an applicant have as a risk appetite. Because we have
• 15:15
  Speaker 2: already somewhat priced into Bank of England based rate increases,
• 15:20
  Speaker 2: so it is highly likely that by the end of
• 15:22
  Speaker 2: this year you will probably be looking at nearly four
• 15:26
  Speaker 2: and a half percent on that track rate. However, if
• 15:30
  Speaker 2: the rate then turns around and starts going downwards just
• 15:33
  Speaker 2: as quickly as it went upwards, then you might very
• 15:36
  Speaker 2: well find that product beneficial. If it keeps on going north,
• 15:41
  Speaker 2: then that product is not as clever.
• 15:44
  Speaker 1: Suddenly everyone has to be an expert on inflation.
• 15:46
  Speaker 2: Right, correct. And I think it's being used more by
• 15:51
  Speaker 2: people who are expecting some sort of windfall, big bonuses
• 15:56
  Speaker 2: in inheritance, some sort of asset payout that they could
• 16:00
  Speaker 2: then use that tracker rate and the flexibility that comes
• 16:03
  Speaker 2: with it to make it rather large overpayment. Because when
• 16:08
  Speaker 2: you're looking at interest rates at st four and a
• 16:10
  Speaker 2: half odd percent, to achieve that as a net return
• 16:13
  Speaker 2: in the market is a little bit more difficult than
• 16:17
  Speaker 2: most people would like. So therefore we're seeing a lot
• 16:20
  Speaker 2: more people reduce their outside their mortgage lending because of
• 16:25
  Speaker 2: the fact that it's got a guaranteed return if you.
• 16:28
  Speaker 1: Like, yeah, well the offset mortgage. Are you seeing demand
• 16:33
  Speaker 1: for that less?
• 16:34
  Speaker 2: Yeah? Less and less popular, mainly because of the fact
• 16:37
  Speaker 2: that it costs the lenders so much to administer it.
• 16:41
  Speaker 1: Okay, so it's the lender who's finding it unattractive, not
• 16:43
  Speaker 1: the borrower.
• 16:45
  Speaker 2: The borough will generally find it quite attractive if it's
• 16:48
  Speaker 2: used correctly. But what we see on our side is
• 16:52
  Speaker 2: that offset mortgages are generally around about sort of fifteen
• 16:55
  Speaker 2: to seventeen percent more expensive in rate than you'd be
• 17:00
  Speaker 2: able to get a standard product for now, that means
• 17:03
  Speaker 2: that you have to have that amount of money or
• 17:06
  Speaker 2: more in your offset account at all points during your
• 17:09
  Speaker 2: mortgage in order to be able to meet what you
• 17:12
  Speaker 2: could have got on a standard mortgage. It's only if
• 17:15
  Speaker 2: you've got more than that sort of seventeen percent that
• 17:17
  Speaker 2: you start to benefit compared to what you would have
• 17:20
  Speaker 2: had on a normal mortgage. It works quite nicely for
• 17:23
  Speaker 2: people who are capital raising because they are at the
• 17:27
  Speaker 2: end of their fixed rates and they want to do
• 17:30
  Speaker 2: a massive home renovation and all that money needs to
• 17:33
  Speaker 2: set somewhere while they drip it out over time. But
• 17:40
  Speaker 2: you know, if you haven't got the right situation for
• 17:42
  Speaker 2: the requirement for that, then it isn't a product that
• 17:47
  Speaker 2: is as popular as you want as you might think.
• 17:50
  Speaker 2: Most people who have that cash available try and pay
• 17:53
  Speaker 2: off the mortgage with it.
• 17:55
  Speaker 1: Yeah, okay, so this all seems relatively straightforward. We'd have
• 17:58
  Speaker 1: no idea what's going to happen. Next in terms of
• 18:00
  Speaker 1: interest rates. So you might as well get a deal
• 18:02
  Speaker 1: on the table, whether you are buying for the first
• 18:05
  Speaker 1: time or whether you were remortgaging, and just keep reviewing
• 18:08
  Speaker 1: it up until the last minute and take it from there.
• 18:10
  Speaker 1: But there's no point in sitting around waiting.
• 18:12
  Speaker 2: I definitely wouldn't advocate that atrole.
• 18:16
  Speaker 1: John, I interpreted you again.
• 18:17
  Speaker 3: Sorry, No, this is a really minor point. But one
• 18:21
  Speaker 3: thing I have noticed and sort of keeps the current
• 18:25
  Speaker 3: to me, is that whenever we used to talk about
• 18:27
  Speaker 3: the property market prior to the financial crisis, there was
• 18:31
  Speaker 3: basically no such thing as a setup fee other than
• 18:34
  Speaker 3: an awful lot of free mortgages. And now you know,
• 18:38
  Speaker 3: set up fees are as you say, they see me,
• 18:40
  Speaker 3: start about a grand and go as high as two.
• 18:44
  Speaker 3: How do you what do you say to people in
• 18:46
  Speaker 3: terms of thinking about set up fees? What should you
• 18:49
  Speaker 3: be looking out for, What do you need to consider
• 18:52
  Speaker 3: in terms of how it actually affects the cost of
• 18:55
  Speaker 3: the product.
• 18:57
  Speaker 2: The setup fee basically comes down to mathematics. John. You know,
• 19:03
  Speaker 2: if the differentiation between a product with a fee and
• 19:06
  Speaker 2: one without a fee, multiplied by your loan balance over
• 19:10
  Speaker 2: a two, three, or five year period that you take
• 19:12
  Speaker 2: the mortgage for generally will always you know, we'd advocate
• 19:16
  Speaker 2: the product with the fee if the savings are more
• 19:20
  Speaker 2: than the cost of the fee. And as far as
• 19:23
  Speaker 2: the fee is concerned, obviously we're talking earlier about, you know,
• 19:28
  Speaker 2: the financial impact of applying for a mortgage. We never
• 19:31
  Speaker 2: really advocate that a client pays for a pays for
• 19:34
  Speaker 2: an arrangement fee upfront, mainly because of the fact that
• 19:38
  Speaker 2: if we change lender, you then have to go back
• 19:41
  Speaker 2: to them and ask for a refund. And there's a
• 19:43
  Speaker 2: little bit luck dealing with HMRC quick to take your money,
• 19:46
  Speaker 2: but really slow to get it back. So I would
• 19:50
  Speaker 2: say to you that, you know, you add it to
• 19:52
  Speaker 2: your mortgage, but each one of the lenders generally has
• 19:55
  Speaker 2: an overpayment facility allowed, which is ten percent of the
• 19:58
  Speaker 2: outstanding mortgage balance. So if you add the fee, best
• 20:03
  Speaker 2: practice would be your first payment goes out, you ring
• 20:07
  Speaker 2: the lender up, you make that one thousand pounds cash payments,
• 20:10
  Speaker 2: and effectively you won't be incurring any interest on that money,
• 20:14
  Speaker 2: but you still be benefiting from the cheaper rate that
• 20:16
  Speaker 2: that product gives you. We generally find the magic number
• 20:20
  Speaker 2: seems to be around about one hundred and seventy one
• 20:23
  Speaker 2: thousand pounds, because at that sort of level of loan size,
• 20:28
  Speaker 2: the multiple between the rate difference means that paying the
• 20:32
  Speaker 2: fee at thee thousand pounds is either worth it or not.
• 20:35
  Speaker 2: Once you go to two hundred three hundred, four hundred
• 20:38
  Speaker 2: thousand pounds worth of lending, then generally speaking, the fee
• 20:41
  Speaker 2: product is always worth taking.
• 20:44
  Speaker 3: Yeah, yeah, Okay, that's.
• 20:46
  Speaker 2: Just all have on that.
• 20:48
  Speaker 1: Okay, last question, last question, I'm going to ask you
• 20:52
  Speaker 1: the impossible question away from mortgages. When you look at
• 20:55
  Speaker 1: the property market in general, and I know that you
• 20:57
  Speaker 1: just said that maybe there are good deals around on
• 21:00
  Speaker 1: flats for younger people who maybe first time buyers, etcetera.
• 21:02
  Speaker 1: But then there are all those worries about plodding service charges,
• 21:05
  Speaker 1: all that kind of thing around the edge, the uncertainty
• 21:08
  Speaker 1: about what's going to happen with leaseholds, all these kind
• 21:11
  Speaker 1: of things are all that out there as uncertainties. But
• 21:13
  Speaker 1: across the market as a whole, how does it look
• 21:16
  Speaker 1: to you? And we've seen a lot of real terms,
• 21:19
  Speaker 1: quite dramatic declines, particularly in London, did it look to
• 21:23
  Speaker 1: you like things are going to pick up? From here,
• 21:24
  Speaker 1: or does it look to you from the business you're
• 21:26
  Speaker 1: seeing that everything's going to stay a little uncertain for
• 21:29
  Speaker 1: a while.
• 21:31
  Speaker 2: I think the market is split, in my opinion, into three.
• 21:34
  Speaker 2: You've got your super prime London properties which you know,
• 21:38
  Speaker 2: very very high values, lots of foreign buyers coming in
• 21:42
  Speaker 2: and buying those properties or not, as it might be,
• 21:45
  Speaker 2: they've seen a bit of a knock in confidence in
• 21:49
  Speaker 2: pricing because of the fact that you know, the government,
• 21:51
  Speaker 2: the taxation structures, all the other bits and pieces work
• 21:54
  Speaker 2: against them. Then you've got your stock standard UK house
• 22:00
  Speaker 2: which you know for a family unit that seems to
• 22:04
  Speaker 2: be quite strong and still achieving in most cases it's
• 22:09
  Speaker 2: asking price if not over And then you've got your third,
• 22:14
  Speaker 2: which is your your flats. Now all those things that
• 22:17
  Speaker 2: you mentioned earlier, you know, the lease hold, the fact
• 22:22
  Speaker 2: that your service chargers are you know, quite quite high
• 22:26
  Speaker 2: on a lot of these new build properties and the like,
• 22:29
  Speaker 2: and the uncertainty as to what's going to happen with
• 22:31
  Speaker 2: the lease is leading to those properties being a little
• 22:36
  Speaker 2: bit more uncertain and a little bit lower in price
• 22:41
  Speaker 2: than we would have seen a couple of years ago.
• 22:44
  Speaker 2: And I think that's also coupled with the fact that
• 22:46
  Speaker 2: we are seeing so many landlords exiting the market, we've
• 22:50
  Speaker 2: just now got an imbalance with an oversupply of properties,
• 22:56
  Speaker 2: and that uncertainty is meaning that the demand is not
• 22:59
  Speaker 2: there because the interest rates are a little bit higher
• 23:01
  Speaker 2: given the Iranian war. If we were still in that
• 23:05
  Speaker 2: position where the interest rates were closer to sort of
• 23:08
  Speaker 2: three and a half four percent, it might very well
• 23:11
  Speaker 2: be a very different conversation that we're having now, because,
• 23:14
  Speaker 2: like I was mentioning earlier, on that inflection point where
• 23:17
  Speaker 2: rentals and owning, you know, have got to this level
• 23:21
  Speaker 2: they kind of equal at this point, whereas you know,
• 23:25
  Speaker 2: before the war in February March, it was notably cheaper
• 23:30
  Speaker 2: for you to be able to own a property if
• 23:32
  Speaker 2: you could, rather than rent it. So I think we
• 23:38
  Speaker 2: are going to remain in a situation where flats are
• 23:40
  Speaker 2: a little bit less in demand. And I think the
• 23:46
  Speaker 2: flip side of that is that from what I noted,
• 23:49
  Speaker 2: the builders aren't really building as much as the government
• 23:52
  Speaker 2: wanted them to. They had a target of one point
• 23:55
  Speaker 2: five million extra homes for the most part, but those
• 24:00
  Speaker 2: builders are way under target and actually not pushing forward
• 24:05
  Speaker 2: with new developments at the speed that they musk that
• 24:08
  Speaker 2: they thought they would have because of all these other issues.
• 24:11
  Speaker 1: Yeah yeah, okay, all right, well a bit optimistic. Not
• 24:15
  Speaker 1: that optimistic, John.
• 24:18
  Speaker 2: Anything, family houses are going to do very well because
• 24:22
  Speaker 2: you know the builders are building flats, they're not building houses.
• 24:26
  Speaker 1: Yeah yeah, John, anything else we should ask before we
• 24:29
  Speaker 1: move on?
• 24:30
  Speaker 3: Thanks for the thing that will makes perfect sense?
• 24:32
  Speaker 1: Okay, brilliant, Thank you, Anthony. I hope that was helpful
• 24:35
  Speaker 1: to anyone who's wondering about mortgages. But if you have
• 24:37
  Speaker 1: more questions, to write in and let us know. Thank you, John,
• 24:41
  Speaker 1: Thank you, Anthony. Thanks for listening this week's Maren Dogs
• 24:44
  Speaker 1: Your Money. If you like our show, rate review, and
• 24:46
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• 24:49
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• 24:51
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• 24:55
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• 24:57
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• 25:00
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• 25:03
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