Mortgage rates lowest since 2003 – Should you rush in?

691716_howarth_homeThe headlines announced last week that today’s mortgage rates are the best since 2003 and more lending is taking place, with first time buyers at an all time high. So is it time to throw caution to the wind and go for it?

As a naive consumer, it sounds great to me. But apparently some of the new mortgage deals on the table aren’t quite what they seem. If you want to get a foot on the property ladder, it’s more important than ever to do your homework before signing on the dotted line.

If you only have a small deposit you might find lenders are particularly hard to please and you struggle to qualify for a loan in the first place. Say you missed a payment on your mobile phone contract. Once upon a time it didn’t matter. But these days it can spoil your chances of borrowing money. Jonathan Harris from Anderson Harris called reasons like this “seemingly spurious” and he should know. It certainly doesn’t seem to make common sense.

Arrangement fees on some mortgage products are horribly high, making the low price deal you think you’re getting nowhere near as good as it looks on the surface.

You might find the actual interest rate you’re asked to pay is pretty high… even if the % rate you see in the adverts looks really good. I imagine this kind of advertising skates pretty close to the Advertising Standards rules, but I’m only a humble consumer. If I was them I’d put a stop to it.

Mortgage brokers are unhappy because it means they can’t find good products for their customers. Consumers are fed up because getting a mortgage is like pulling teeth. Mortgage providers are happy because they can cherry-pick the best risks, probably the people who can afford to pay more for their loan, presumably less likely to get into financial difficulties.

Why are mortgage lenders so farty? It seems silly when defaulting on your payments for long enough means the lender repossesses your home. So they don’t exactly lose out. But I’m only a consumer – what do I know!

Researching the mortgage market yourself

I’d die of boredom and frustration. But if you have the time, patience and inclination you can research the mortgage market yourself. I’ve worked in financial services and I know how convoluted their products are. And how baffling the small print is. They’re supposed to make everything plain English but most of the time it might as well be Swahili.

Actually, as someone who worked in financial services direct marketing for a decade, can’t make head nor tail of most of it. I tried to translate a holiday insurance policy into plain language a while ago as an interesting copywriting and marketing exercise. It completely stumped me. Which doesn’t hold out much hope for people who aren’t familiar with the industry.

Getting a good Financial Adviser on the case 

Independent financial advisers have the entire market at their fingertips and are experts at sussing out the best mortgages. Tied financial advisers have access to products from one or a handful of lenders. Either way they know the lingo and can decode the jargon for you. And they’re legally bound to explain all the ins and outs to you. Ask friends, relatives, colleagues or your Twitter community if they can recommend someone.

(Thanks to for the free image)