Now we are in 2021 will it be a happy new year for those with mortgages? We predict what this year has in store for the mortgage market from low mortgage rates to stamp duty and payment holidays.
Will mortgage rates still be low?
Mortgage rates have been pretty attractive for borrowers for a number of years now, particularly for those who have significant equity in their home.
Low mortgage rates are unlikely to go anywhere, at least in the early part of 2021. With Covid still rife in the UK, as well as the Brexit effect, the Bank of England is likely to keep the base rate at 0.1, certainly until the dust settles.
However with the country in a strict lockdown and covid vaccinations being rolled out, then hope is in sight for the end of the pandemic. If the economy can get back on its feet, and confidence rises in the property market we may see a small rise in the base rate.
If you are looking to remortgage, and your financial situation is stable, then you could grab yourself a decent deal. Speak to a mortgage broker to compare low mortgage rates – they can search the whole of the market making it simpler to find the best deal for you.
There may be a rush on homes before 31st March
Although coronavirus has stopped many things in its tracks, people are still allowed to buy and sell properties, and can move home during lockdown. Whilst people may be a little more cautious, perhaps due to the uncertainty and worries around finances, there is one thing that could bring the property market to life in the first few months of 2021.
Until 31 March 2021, you’ll pay no Stamp Duty on the purchase of your main property costing up to £500,000. This means huge savings for many people buying properties at the top end of the scale, and is a significant boost for first-time buyers.
However, the only catch with this, is that the sale must have been completed by 31st March so time is ticking on this initiative.
Payment holidays are still a hot topic
There have been numerous measures to support people financially during the coronavirus pandemic. Mortgage payment holidays increased in 2020, allowing worried borrowers to pause repayments for up to six months.
Whilst these authorised payment holidays won’t register as missed payments on your credit report, they will still be visible so mortgage lenders will be able to view this information should you want to borrow again in the future.
Whilst payment holidays relieve pressure in the short term, please remember that this debt won’t be written off. You still need to make these payments in the future. You can do so by paying off larger amounts or by adding additional time onto your mortgage. Always ensure that you seek advice before taking a payment holiday or making any significant changes to your mortgage.
Homeowners may choose to borrow more for home renovations
There’s nothing like spending too much time at home to notice everything that’s wrong with your home, or things that you’d like to change.
If the Stamp Duty cut hasn’t enticed you to move home, then you may be looking to make home renovations instead. With more time on your hands you may choose to do the work yourself, however many tradesmen are still working under safe measures.
Renovations can be expensive however if you’ve decided to stay put, then you could benefit from the low mortgages rates by remortgaging to release some of the equity in your home.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.