Nathan Lamb is a Mortgage and Protection Adviser with Bridge of Don Mortgage and Financial Solutions. He worked for two high street Banks for almost 30 years and has been a Mortgage Adviser since 2018. Nathan works closely with the team at Northwood and has access to an extensive range of banks, building societies and insurance providers to help ensure clients receive the most appropriate advice when arranging a new mortgage.
Can you provide a brief overview of the latest mortgage news?
After the availability of incredibly low interest rates from early 2009 to early 2022, the last couple of years have been quite tough for borrowers with interest rates getting back to pre-2009 levels.
Although the Bank of England held the Base Rate at 4.50% last week, the good news is that we are anticipating interest rate reductions going forward, so this should make life a little easier with lower monthly payments.
What is your advice to anyone looking for a mortgage just now, including first time buyers?
The first thing I would recommend is to speak to a mortgage adviser as early in the process as possible to find out how much you can borrow and to get an “agreement in principle”. This doesn’t cost anything with Bridge of Don Mortgage and Financial Solutions and doesn’t commit you to anything either. It does, however, let you know how much you could potentially borrow so you know the types of properties and prices you can consider. The mortgage adviser should also let you know what your monthly payments could potentially cost so you know what would be affordable.
Is the sub 4% mortgage rate currently on offer from some banks worth considering?
While it is possible to find a sub 4% mortgage rate the market is limited and there are a few things we need to bear in mind:
- Generally, these mortgages are only available to clients borrowing at 60% or less
- There may be arrangement fees payable when setting up one of these mortgages. Dependent on the size of mortgage it may be worth considering a mortgage with a higher interest rate and a lower (or no) arrangement fee.
- The sub-4% rate typically relate to a five-year fixed rate mortgage. Fixing the mortgage rate for five years may not be the right thing to do.
Do you think mortgage rates will drop again this year?
The short answer is “yes”. The Bank of England Base Rate fell to 4.5% on 05 Feb 2025, the lowest it has been since June 2023, and we are anticipating further reductions to come this year.
If the Base Rate falls as we anticipate then this will be good news for anyone on a variable “tracker” interest rate (i.e. a rate that is directly linked to the Base Rate); however, lenders don’t necessarily have to change their fixed rates whenever the Base Rate changes, but we are optimistic that fixed rates will fall in the weeks / months ahead.
Do you think the lower interest rate will stimulate the market in Aberdeen and Aberdeenshire
The easy answer to this is “yes”; however, I firmly believe that people buy property when the time is right for them, regardless of where interest rates are or where the housing market is. Lower interest rates certainly won’t do any harm.
Should buyers consider a 5-year fixed rate or something less than that?
In general terms, most lenders are offering slightly lower interest rates to clients who fix their mortgages for five years rather than for two or three years, or to clients who take a variable rate. If clients fix for five years, they are generally getting the lowest rate available at the moment and they are getting peace of mind that they don’t have to worry about their mortgage for the next five years; however, with interest rates hopefully falling, it may make sense for some clients to take a shorter-term rate. Although a shorter-term interest rate (i.e. 2 years) will mean a higher mortgage payment at the outset – this allows clients to review their mortgage options again in 2 years’ time when interest rates should hopefully be lower.
Any final advice?
Some people are tempted to go to their own Bank to set up a mortgage, but I would always recommend speaking to a mortgage adviser instead. The main reasons for this are:
- Your own bank’s interest rates may be relatively high in comparison to other lenders where a mortgage adviser can search through lenders to get the most appropriate mortgage deal for you;
- Some properties are made with “non-traditional” construction, and your own bank may not even be prepared to consider a mortgage against one of these properties. A mortgage adviser should be able to find lenders that can assist and then provide the right advice to get the most appropriate mortgage from those lenders.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances and will be agreed with you before proceeding, but we estimate it will be £995 which is payable at application
Nathan Lamb, trading as Bridge of Don Mortgage and Financial Solutions, is an Appointed Representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.
