Mortgage myths debunked

As interest rates fluctuate, our sound advice will help you find the most affordable deal says Enzo Mora CEO and founder of The Mortgage Brain

Inflation, which was on a downward trend last month, is now predicted to rise as the price of petrol and groceries go up as global uncertainty persists, suggesting that the Bank of England is likely to delay any interest rate cuts. Instead a more gradual path is expected for interest-rates to fall in 2026. Working closely with lenders, we are the first to know of new products and can advise customers of the best options. We’re able to reserve rates in advance which can be revisited nearer to the time of expiry, compared to newer deals and the best most affordable decision made.

Mortgage myths debunked

Once again, research has shown that millions of would-be homeowners are being held back by widespread confusion about mortgages, according to the HomeOwners Alliance. Some of the myths include 62% of those surveyed thinking you need at least a 10% deposit to buy a home (there are many 5% and 10% products to access), 65% saying that having bad credit means you cannot get a mortgage (that’s where a broker like The Mortgage Brain can look at other factors and find the right lender), 47% believing the lowest interest rate automatically means the cheapest mortgage overall (our advisers work out what the total costs will be over the term of the mortgage including lender arrangement fees which may mean it’s not the most affordable) and 40% thinking it’s best to get a mortgage with their current bank (we work with all lenders across England so you are not limited to a narrow option of loans). Our aim is to encourage the conversation with first-time buyers so they can explore getting mortgage with clear independent advice. We also arrange hundreds of new build mortgages for first-time buyers and work closely with UK house builders to advise their clients on the best deals.

Gradual increase in buy-to-let lending

Nationwide’s latest House Price Index shows a gradual increase in buy to let purchases involving a mortgage, although activity remains quite subdued compared to historic levels, reflecting the continued headwinds impacting this part of the market. The higher interest rate environment tends to exert more of a drag on landlord demand (rather than owner occupier), while the upcoming Renters’ Rights Act has also impacted landlord sentiment. Typically, rent must cover 125-145% of the mortgage interest payment. We’ve seen more five-year fixed products helping landlords meet stress tests and some lenders are reducing these rates where rental cover is strong. Ongoing tax pressures also mean many landlords are moving properties into limited company structures, consolidating borrowing, rebalancing portfolios toward stronger yielding stock and reducing leverage on weaker assets.