Mortgages, tell me more!
We recently spoke to an independent mortgage expert who’s helped many of our customers buy their homes through shared ownership over the past 20 years. Here’s what they had to say about the current mortgage market and what might happen next.
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Thinking of moving, remortaging or buying?
What’s a mortgage?
A mortgage is a loan you take out to help buy a home. You borrow the money from a bank or building society and pay it back over time – usually 15 to 35 years – with interest. Most people use mortgages because homes are expensive, and few can afford to pay the full or share price.
There are different types of mortgages which include:
- Repayment: You pay off both the loan and the interest each month
- Interest-only: You only pay the interest each month requiring a plan to repay the loan element later (typically unable to be used with a shared ownership home).
In addition you also have the following options to consider:
- Fixed-rate: Your monthly payments stay the same for a set time
- Variable-rate: Your payments can go up or down depending on interest rates.
Because the loan is secured against your home, the lender can take the home (repossess) if you stop making payments.
What’s happening in the market?
So far in 2025, the Bank of England has lowered interest rates three times – from 4.75% in February to 4% in August. That’s good news for borrowers, as lower rates usually mean cheaper mortgage deals.
The size of your deposit can also affect the rate you get, for example at the time of writing:
- A 5% deposit might get you a rate from 4.66%
- Whereas a 25% deposit could unlock rates as low as 3.95%.
Generally, the more you can put down, the better the deal.
When your current mortgage deal ends, your lender will usually offer you a new one – but it’s always worth checking with a broker to make sure you’re getting the best option.
Can you afford it?
Lenders look at your income, spending, credit history, and more, to decide how much you can borrow. Recently, some rules have been relaxed, meaning some buyers can now borrow up to 20% more than before. At bpha we have a panel of mortgage brokers who specialise in shared ownership and can help you explore your affordability.
In March 2025:
- Around 64,000 new mortgages were approved for home purchases in the UK
- 33,000 remortgages were approved – the highest in nearly three years.
What’s next for 2025?
The latest interest rate cut was a close call with just one vote from the decision-makers (the Monetary Policy Committee) making the difference. This means future cuts might not happen as quickly as expected, but nothing is guaranteed!
Most people are still choosing fixed-rate mortgages for peace of mind, but this could change if rates keep falling.
What should you do?
- Buying? Don’t wait! Explore your options now and lock in a deal. You can always switch if a better one comes along before you complete
- Remortgaging? If your current deal ends within six months, start looking now. A broker can search across the market to source you the best deal and talk you through the options available
- Avoid overpaying! Starting the remortgage process early will reduce the risk of you falling onto your lenders expensive standard variable rate
- Lock in! When rates are uncertain, it’s advisable to lock into a deal now in case the best deals disappear
- Keep checking – even after you’ve secured a deal, it’s worth reviewing in case something better comes up.
In summary
Mortgage rates are coming down, and lenders are offering more options. Whether you’re considering buying or remortgaging, now is a great time to explore your choices.
Want to know more about buying, selling, or remortgaging your shared ownership home contact bpha on 01234 674070 or Homeownership@bpha.org.uk