Real estate buyers benefit from the mortgage price match

The current price war among mortgage providers offers significant advantages to property buyers. As interest rates continue to drop, the question arises whether finalizing a property purchase at this time is the right step. Those currently in the process of contract settlement may have secured a mortgage agreement with interest rates between 4% and 5% a few months ago. Today, however, mortgages for larger deposits are being offered at around 3.7%, which could significantly impact monthly payments. If expectations of a further rate decline in November materialize, mortgages could become even cheaper. This places buyers in settlement in an interesting position: their currently secured interest rate could appear expensive compared to the latest offers. Fortunately, most lenders allow adjustments to the mortgage agreement until final settlement. Mark Harris, Managing Director of mortgage broker SPF Private Clients, explains: “In a falling interest rate environment, it is understandable that borrowers want to secure the lowest possible rates.” Angela Kerr of the HomeOwners Alliance also recommends reviewing the original terms and switching when possible to potentially save thousands of euros. An example from the market: In July, Barclays' best five-year fixed rate offer was 4.23%. A 25-year loan of 200,000 pounds would have cost 1,081 pounds monthly. Today, the Coventry Building Society offers an interest rate of 3.69%, reducing monthly costs to 1,022 pounds. A switch could save 696 pounds annually. However, buyers should be cautious that a new mortgage application does not delay the purchase. A change with the same provider is usually quicker, while switching to a new provider requires fresh credit checks. Mark Harris warns about the altered lending conditions, which may lead to new challenges even with lower rates. “Some lenders, such as Halifax and Santander, conduct a re-scoring check after a certain period.” While the potential savings are enticing, it remains essential to find the balance between the best mortgage rate and a smooth property purchase.