In this latest interview, Aaron Prested, specialist financial adviser at Wesleyan Financial Services, discusses the current challenges in the mortgage market and how dental professionals can prepare for the future.
What are some of the current challenges?
Market uncertainty poses one of the biggest challenges in the mortgage industry. Lenders have been pulling around 800 mortgage deals, which accounts for approximately 10% of the market due to the uncertainty surrounding interest rates.
As a result, planning becomes crucial in order to minimise the potential impact on personal finances and prepare for worst-case scenarios.
What can dental professionals do going forward?
To mitigate the effects of market uncertainty, individuals should proactively plan and seek advice. It is important to stay informed about the likely interest rates when considering new mortgages. There have been 13 consecutive interest rate rises from December 2021 to 22 June 2023 aimed at controlling inflation.
Unfortunately, this has negatively affected the cost of living, adding to the existing financial crisis. However, by planning ahead, individuals can regain control over their financial situation.
Recent trends
Two main types of mortgages exist: fixed rate and variable rate. Fixed rate mortgages offer stability as the interest rate remains constant throughout the agreed-upon term, allowing for easier budgeting.
On the other hand, variable rate mortgages provide more flexibility but come with the risk of increased payments if interest rates rise. It is important to consider personal financial goals and needs when choosing between the two options.
Recent trends in the mortgage market show a preference for five-year fixed rate mortgages. Interestingly, this is a reversal of what was observed two years ago when two-year fixed rate deals were more affordable. The shift towards longer-term fixed rate mortgages is driven by the desire to reduce monthly expenses.
In the face of market uncertainty, individuals should take proactive steps to manage their mortgages. This includes considering various options, seeking professional advice, and staying informed about market trends.
By doing so, individuals can better prepare for the future and minimise the potential impact on their financial wellbeing.
You can speak to a specialist financial planner at Wesleyan Financial Services as part of a no-obligation financial review by visiting wesleyan.co.uk/dental or calling 0800 316 3784.
Your mortgage is secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
