Category: Mortgages

How have mortgage interest rates changed over time in the UK? Here we explore the historical timeline in more detail. 

Over the years and previous decades, mortgage interest rates have changed in accordance with the Bank of England base rate.

Below we explore the trends and factors that impacted them and how things may look in the future.

PS Please refer to our mortgage interest forecasting for the next 5 years here.

Average Mortgage Interest Rate UK 25 Years

The table below shows the average mortgage interest rates for various types of mortgages in the UK from 2000 to the current year.

Year	2-Year Fixed Rate	3-Year Fixed Rate	5-Year Fixed Rate	10-Year Fixed Rate	2-Year Variable Rate
2000	6.5%	6.2%	6.0%	6.5%	6.3%
2001	5.8%	5.6%	5.5%	5.9%	5.7%
2002	5.2%	5.0%	5.0%	5.3%	5.1%
2003	4.8%	4.6%	4.5%	4.9%	4.6%
2004	4.5%	4.3%	4.3%	4.6%	4.2%
2005	4.4%	4.2%	4.2%	4.4%	4.1%
2006	4.6%	4.4%	4.4%	4.6%	4.3%
2007	5.0%	4.8%	4.8%	5.0%	4.7%
2008	6.0%	5.8%	5.7%	6.0%	5.6%
2009	4.0%	3.8%	3.7%	4.0%	3.6%
2010	3.5%	3.3%	3.3%	3.6%	3.2%
2011	3.8%	3.6%	3.5%	3.9%	3.4%
2012	3.6%	3.4%	3.4%	3.7%	3.2%
2013	3.5%	3.3%	3.3%	3.6%	3.1%
2014	3.4%	3.2%	3.2%	3.5%	3.0%
2015	3.2%	3.0%	3.0%	3.3%	2.8%
2016	3.1%	2.9%	2.8%	3.2%	2.6%
2017	3.0%	2.8%	2.7%	3.1%	2.5%
2018	2.9%	2.7%	2.6%	3.0%	2.4%
2019	2.8%	2.6%	2.5%	2.9%	2.3%
2020	2.7%	2.5%	2.4%	2.8%	2.2%
2021	2.6%	2.4%	2.3%	2.7%	2.1%
2022	3.5%	3.3%	3.2%	3.6%	3.1%
2023	5.0%	4.8%	4.7%	5.1%	4.6%
2024	4.7%	4.5%	4.4%	4.8%	4.3%

 

Table data source: Statistica. 

Average historical mortgage rate in the UK

From 1995 until 2022, the average mortgage interest rate in the UK averaged 5.62%.

When were mortgage rates at their highest?

In the last 25 years, the average mortgage interest rate peaked at 8.87 per cent in September 1998.

When were mortgage rates at their lowest?

In the last 25 years, the average mortgage interest rate was at its lowest in September 2021, at which point it was 3.59 per cent.

Who is affected by mortgage interest rate increases and changes?

It’s important to be aware that in the short term changes in mortgage interest rates don’t impact current mortgage borrowers since the majority are on a fixed term mortgage.

In fact, around 75% of mortgage borrowers are on a fixed term mortgage and in 2019 over 90% of new mortgage borrowers opted for a fixed term mortgage.

A fixed-rate mortgage is a mortgage with a specific interest rate locked in for a certain duration e.g. 2, 4 or 10 years.

Therefore, the majority of people i.e. those on a fixed-rate mortgage will see no change in their mortgage payments in the short term.

What about those on variable-rate mortgages?

Those who are most vulnerable to changes to the interest rates are the over 850,000 individuals on a variable-rate mortgage.

In practical terms, UK Finance estimates that a rise in the Bank Rate of 0.15 percentage points will lead to an average increase in repayments by £15.45 per month.

What determines the mortgage interest rates?

Although your actual mortgage rate will be determined by factors like the product you choose and your particular lender, the Bank of England’s base rate also has a major impact to mortgage interest rates.

The base rate doesn’t just impact mortgages, but a wide range of financial products, as well as the value of the pound itself.

The Bank of England review the base rate on the first Thursday of every month and may be changed depending on the rate of spending in the economy.

For example, if spending is deemed to be too low, the base rate will be decreased and if it’s too high, it will be reduced.

Bank of England base rate 1979-2023

 

	Bank rate at year-end (%)*
1979	17
1980	14
1981	14.375
1982	10
1983	9.0625
1984	9.5
1985	11.375
1986	10.875
1987	8.375
1988	12.875
1989	14.875
1990	13.875
1991	10.375
1992	6.875
1993	5.375
1994	6.125
1995	6.375
1996	5.9375
1997	7.25
1998	6.25
1999	5.5
2000	6
2001	4
2002	4
2003	3.75
2004	4.75
2005	4.5
2006	5
2007	5.5
2008	2
2009	0.5
2010	0.5
2011	0.5
2012	0.5
2013	0.5
2014	0.5
2015	0.5
2016	0.25
2017	0.5
2018	0.75
2020	0.25
2020	0.10
2021	0.25
2022	0.5
2022	0.75
2023	5.0

 

Source: Bank of England Official Bank Rate History

What is the current mortgage interest rate?

As of June 2024, the Bank of England base rate stands at 5.25%.

According to Statista’s latest data, the average mortgage rate was 4.7% as of January 2024.

However, as mentioned this is an average and the exact rate offered to you will depend on a range of factors including your credit score, the mortgage lender, type of mortgage etc.

According to Trussle, at present, the average cost of two- and five-year fixed-rate deals across all deposit levels stands at 5.37% and 4.84% respectively.

Why are mortgage rates increasing?

The Bank of England increased the base rate to “cool” the economy and control surging inflation.

In October, the Consumer Prices Index (CPI) measure of inflation rose to a heady 11.1% in the 12 months to October, in direct conflict with government targets of 2% inflation.

Unfortunately, if inflation does not start to fall, the Bank of England could decide to continue to increase rates into the new year.

The cost of energy is another major contributor to surging inflation, but thanks to the UK government’s Energy Price Guarantee this has been tempered to a large degree.

Recommended guides: 

• Remortgage for home improvements.
• How long does mortgage approval take?
• Remortgage with bad credit.
• Remortgage for help to buy.

What does this mean for you?

With interest rates changing regularly, there is a lot of volatility in the market at present with mortgage deals being constantly updated to reflect the rapid pace of change.

With this in mind, it’s now unarguably more true than ever that you should contact a mortgage broker for help and advice.

A mortgage broker or advisor can hold your hand through the entire process, from initial searches to dealing with the legal stuff, to ensure the process is as smooth as possible.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

If you’re planning to move or buy a new home and don’t want to lose your current mortgage deal, you can transfer it through a process known as porting.

It can make things easier and save you money, but you can miss out on better deals available on the market.

Read on to learn what porting a mortgage is, how it works and whether it’s the right option for you.

What does porting a mortgage mean?

Porting a mortgage involves transferring your existing mortgage to a different property and maintaining the same deal terms, like the mortgage period and interest rate.

You’ll likely sell your home when moving, and the proceeds can go towards paying off the existing mortgage.

You’ll then resume the mortgage on your new home with the same lender, rates, and terms.

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Reasons for porting a mortgage

Porting is an easy option because you don’t have to do much research on new lenders, product deals, and rates.

You’ll not complete lots of paperwork since the lender already has your information on hand.

It can also save you money if you believe you’re on the best rates available on the market and don’t want to give that up.

It provides consistency if you feel the conditions and terms of the current agreement are perfect for your needs.

It’s a useful option if you have some time left on your current mortgage deal or are locked in a fixed-rate deal and don’t want to pay hefty early repayment charges (ERC).

How does porting a mortgage work?

You must reapply for the deal when porting a mortgage.

Things that can affect your eligibility for the agreement include the new property’s loan to value (LTV), changes in your circumstances since your first mortgage application, and changes in the lending criteria.

The lender will conduct affordability checks and check your credit, so there’s no guarantee that they’ll accept your application again.

The lender will mainly consider whether you can repay the mortgage and their position in terms of risk. If there’s more risk involved, like a higher LTV, they’ll likely not approve you for the same deal.

The lender will also conduct a valuation and survey of the property you plan before making a final decision.

Process of porting a mortgage

You can transfer your mortgage to a new property through the following steps:

Step 1: Determine whether your mortgage is portable

Not every mortgage is portable, so contact your lender or check the terms to determine whether it’s an option for you.

Avoid informing the lender you want to port your mortgage at this point, as you want to ensure it’s the best option for your situation.

Step 2: Determine the overall cost of not porting

Ask the lender if early repayment charges will apply if you sell your house with the fixed rate still in place.

It helps you determine the overall cost of whatever option you choose and see which is better.

Step 3: Consult a mortgage broker or advisor

It’s wise to check whether porting is in your best interests before proceeding, and you can do this by consulting a broker or advisor with experience dealing with porting mortgages.

They have access to the entire market and can check whether sticking with the current mortgage is the best option to ensure you don’t miss out on more suitable terms and better interest rates with a different lender.

Recommended reading for mortgage hunters: 

• Mortgage deposit gifts
• How much does a mortgage broker cost?
• Can you build on the green belt?
• Shortest term mortgage in the UK
• Buying a warehouse in the UK
• Porting a mortgage explained
• Transferring a mortgage

Disadvantages of porting a mortgage

• The main downside is you can miss out on better rates and more favourable terms elsewhere by sticking to your existing deal and lender. If other deals are significantly better, you can consider remortgaging instead of mortgage porting.
• You still have to deal with other fees in porting, including valuation, legal, arrangement, and possibly a transfer fee.
• If the property you’re eyeing is more expensive, you may need to borrow additional money, which can be at a different rate, resulting in two products or mortgages with varying terms and end dates.

Factors that can affect your ability to port a mortgage

The following factors can determine whether you can or should port your mortgage:

Property type

Unusual properties have a limited market, and most lenders consider them a higher risk. If you default and the lender has to repossess, they’ll find it harder to sell than other properties.

Such unique properties can include houses with timber frames, high-rise flats, listed buildings, new builds, non-standard construction, and uninhabitable property.

Most high-end lenders will reject porting a mortgage for the unusual property. However, some specialist lenders can ask for more significant deposits in such cases to offset the risk, so you’re not entirely out of options.

Changed circumstances

The available options can differ if your employment, income, and personal circumstances have changed since you last applied for a mortgage.

You may quickly get more favourable terms and deals if your income and credit have improved, making it an excellent idea to shop around or use a broker to determine the best deal you can qualify for.

However, if you’ve been facing credit problems, your score has taken a hit, or your income has reduced, porting your mortgage might not be the best idea as you’ll likely not meet the lender’s requirements.

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The cost of the property you’re buying

If you’re porting your mortgage to a more expensive property, you’ll likely need extra borrowing if you don’t have the capital to make up the difference.

Additional borrowing is often done on a new mortgage product, meaning you’ll be dealing with two mortgages simultaneously.

Porting to a cheaper property is more straightforward because you’re not borrowing more money.

However, if the property’s value is lower is going down, the loan-to-value (LTV) ratio will likely increase, and the lender can block the move as it puts them at greater risk.

Further reading: 

• How much does the average mortgage cost?
• Modern method of auction 
• What mortgage can I get for £500? 
• Mortgages for discharged bankrupts

Porting A Mortgage Explained Final thoughts

Porting a mortgage is an option to consider if you’re planning to move to a new house and want to maintain your current terms, rates, and lender.

However, it’s not always the best option, so consult a mortgage broker or advisor with experience in mortgage porting so they can help you make the best decision based on your situation.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Need more help? Check our quick help guides: 

• Reasons why a mortgage could be declined on affordability. 
• How reliable is a mortgage in principle?
• How do joint mortgages work?
• Can you get a mortgage on a fixed-term contract?

How does transferring mortgages work? Here we explain the intricacies in simple terms and explain how the whole process works. 

When circumstances in your life change and properties or mortgages are concerned, mortgage transfers may be necessary.

Such situations can include a divorce or the death of a loved one, and the transfer can occur when remortgaging or during a current mortgage term.

Here is everything you need to know about transferring mortgages.

What does transferring mortgages mean?

Mortgage transfers involve transferring an existing home loan to someone else and can refer to adding, removing, or replacing someone else on an existing mortgage.

The process is like a transfer of equity, allowing someone else to take responsibility for the home, mortgage terms, rates, and lender’s charge without getting a new mortgage.

Common examples of mortgage transfers include:

• Turning sole mortgages into joint mortgages

When two people get married or move in together, it’s common to transfer equity.

It involves the original owner splitting the shares they own in the property with their partner by adding their name to the title deeds.

• Turning joint mortgages into sole mortgages

A mortgage transfer can occur when a couple separates or simply wants a sole mortgage instead of a joint one.

One person may leave home, and the one who remains on the property can buy out the other and take sole responsibility for the mortgage.

• Giving shared ownership to a family member

Commonly known as a gifted equity transfer, it involves passing a share of the ownership to someone else without money changing hands.

It often occurs among family members, like a parent adding a child to the property deeds or siblings adding each other.

• Transferring the property to a family member

Transferring whole mortgages to family members often occurs for inheritance tax purposes and as part of long-term estate planning, where the property passes on to someone else.

The person taking responsibility for the mortgage must satisfy the lender’s eligibility and affordability assessments.

Some lenders are more willing to transfer mortgages or equity than others, so it’s wise to consult a mortgage broker or advisor who can give you a more tailored solution based on your circumstances.

Need more help? Check our quick help guides: 

• Reasons why a mortgage could be declined on affordability. 
• How reliable is a mortgage in principle?
• How do joint mortgages work?
• Can you get a mortgage on a fixed-term contract?

How do you transfer a mortgage to someone else?

Mortgage transfers are usually more straightforward than property purchases, but there’s a lot of legal involved.

It mainly consists in completing a TR1 Land Registry form which details the name of the current owner or transferor and the new owner or transferee.

Before transferring a mortgage to someone else, you’ll need to get consent from your existing mortgage lender and obtain copies of the contractual mortgage agreements and the property title deeds.

Lenders often conduct eligibility assessments to confirm the new owner fulfils their requirements before they become equally liable for the mortgage.

Once the lender confirms the new arrangement can fulfil the terms of the agreement, they’ll initiate a remortgage with the addition of the new party and removal of anyone leaving the deeds to relieve their obligations.

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What is the process of transferring mortgages?

There are several steps involved in transferring mortgages or equity:

Step 1: Apply for a new mortgage or remortgage

Since the property’s ownership is changing, a new agreement is necessary.

You can make one with an existing lender through a remortgage or get into a new mortgage with a different lender.

Shopping for a new lender can give you access to more competitive rates and better deals, but more formalities and paperwork are involved and will likely take longer.

Step 2: Find a conveyancer

You need a conveyancer to take care of the legal process of ownership transfer. They’re usually lawyers who specialise in the legal aspects of transferring property ownership from one person to another and can help you deal with the paperwork.

If someone leaves the mortgage, separated legal representation may be necessary, but if you add someone to the deeds, the conveyancer can represent both parties.

Step 3: Identity verification

The parties involved must present identity documents like an ID or driving license to verify who they are.

Conveyancers may also need to verify the source of the funds if you’re buying someone out of the mortgage while facilitating the transfer. They’ll then get the mortgage transfer in motion.

Step 4: Completion

The lawyer will obtain the mortgage deed for all parties to sign and arrange fund transfers, if any.

If someone is leaving the mortgage, they’ll need to fill out and sign an ID1 form in the presence of a witness.

After the process is complete, the conveyancer will provide the land registry with the new property ownership details.

They’ll also calculate any stamp duty that must be paid to the HMRC and arrange for a transfer for the same.

What is the cost of transferring mortgages?

The amount you spend when transferring a mortgage will vary depending on your situation. Standard costs to expect include:

Lender fees

The mortgage lender can include some fees to cover the administrative costs involved with the change.

You may also be liable to an early settlement charge or penalty depending on the terms of your existing agreement.

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Legal fees

Legal costs can vary depending on the property’s value and whether the transfer involves a new mortgage or remortgage. You may also pay to obtain the property’s title and register the land registry change.

Stamp duty

Stamp duty land tax can be the most significant cost associated with transferring mortgages, and you can be liable if the transfer involves a mortgage or equity of £125,000 or higher.

The fees are payable when transferring property ownership in situations other than civil partnership dissolutions or divorces.

Are there checks involved in transferring mortgages?

Yes. The lender must assess the suitability of all parties, including income, credit history and affordability, to ensure they meet eligibility and affordability requirements.

Those taking full or partial ownership must be capable of keeping up with mortgage repayments under the new terms.

Related guides: 

• When was my house built? 
• Buying out a sibling from an inherited house 
• How long does it take to release mortgage funds? 
• Does a valuation mean that a mortgage is approved? 
• Mortgage lenders that accept benefits 
• Can I extend my interest-only mortgage term? 

Transferring Mortgages Final thoughts

Whether you’re looking to add, remove or replace someone else on an existing mortgage, ensure you consult a mortgage broker or advisor for personalised guidance on transferring mortgages based on your situation and needs.

With their extensive market access and expertise, brokers can help you get the best deal and suitable lenders for your changing circumstances.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Recommended reading for mortgage hunters: 

• Mortgage deposit gifts
• How much does a mortgage broker cost?
• Can you build on the green belt?
• Shortest term mortgage in the UK
• Buying a warehouse in the UK
• Porting a mortgage explained

What happens when you pay off your mortgage in the UK? Here we explain the whole process and what’s involved during this exciting time. 

Settling your mortgage once and for all brings a new sense of achievement and pride in the home you truly own.

But what happens when you pay off your mortgage?

Do you throw a party and kick up your feet, or are there other steps you need to take to establish property ownership?

This guide explores what happens when you pay off your mortgage and what to expect.

Final mortgage payment

Ask the lender for your mortgage redemption details or quote before making the final payment. It includes the final amount due to settle the home loan and any associated fees.

The quote shows how much interest and principal you need to pay to own your home free and clear.

You may have to pay some fees with the final mortgage payment to release the final paperwork and ensure the lender takes care of the necessary administration work.

Such fees could include an account fee if you deferred it to the end of the mortgage term and an exit or redemption fee.

Quick help mortgage guides: 

• Best offset mortgage rates UK
• Can you get a mortgage 7 times your salary?
• Contractor mortgages
• Best lifetime tracker mortgages
• Expat mortgages
• Mortgage repayments on a 300k a month mortgage

What documents can you expect?

Once you’ve officially paid off your mortgage, you’ll receive a closing statement letter from the lender confirming you have repaid your mortgage in full and some paperwork to complete.

They’ll also send you a copy of your title deeds and a discharge that removes the lender’s charge over your home.

The lender can remove the charge on your property, or you can instruct your solicitor to discharge the standard security from the Land Registry.

They can help you finalise the arrangements, update the Land Registry and obtain a copy of your deeds. You’ll also pay a small fee for the deeds.

The process is relatively straightforward. The solicitor prepares an application for discharging the security and sends it to the lender for signing.

Once it’s signed and returned to the solicitor, they send it to the Land Registry with the application form and fee.

The application is then processed, and the relevant register is updated to remove the standard security.

If the lender hasn’t sent you any documentation after paying off your mortgage, ensure you contact them and request confirmation that your mortgage has been paid in full and charges on the property removed.

How is your credit score affected after you pay off your mortgage?

Shortly after clearing your mortgage, your credit report will update, but they’ll likely not be a dramatic increase in your credit score.

Over the years, your payment history and amount owed have already been factored into your credit score. Every situation is different, and debt is only one factor that affects your credit score.

For example, the effect on your credit score can be noticeable if you’re paying off a large lump sum. The credit report will suddenly show a much lower or zero amount owed.

Such a metric can be a significant component in your credit score, resulting in a nice positive bump. However, the effect can be negligible if you already have excellent credit.

Ensure you check the report 30 or 60 days after paying off your mortgage to confirm that it reflects as paid off and there are no outstanding balances which can affect your credit score.

Other steps after paying off your mortgage

·       Contact your insurance company

Contact third parties like the home insurance linked to your mortgage, and inform them that you’ve cleared the mortgage and no longer owe the mortgage lender any money.

If you were paying through the lender, inform them you’ll now pay the bills directly and have them remove the lender from the policy. Ensure you do the same for any other insurance, like a flood coverage policy.

·       Cancel automatic payments

Cancel any direct debit or the automatic monthly mortgage payments you had set up to ensure you don’t make unnecessary payments to the lender and start chasing refunds.

·       Contact the tax collector

If property tax statements have been going to the lender, you have to contact them and let them know of the change in ownership if the lender hasn’t done so already. Ensure all statements come to your directly.

·       Set money aside for insurance and taxes

Now that you’re a complete property owner, you must consider property tax obligations and ensure you stay protected by keeping up with payments for homeowner’s insurance.

Insurance protects the house structure and your personal liability and contents.

What happens after paying off a mortgage early?

While paying off your mortgage early provides excellent relief from years of monthly payments, most lenders will impose early exit penalties or fees.

Such charges are aimed at helping lenders get back some of the money they lose in interest when you repay the mortgage early.

Consult the terms and conditions of the mortgage agreement before you pay off the mortgage early or make more significant mortgage repayments.

Early repayment charges are usually a percentage of the loan or equivalent to a certain number of monthly payments.

Sometimes the cost of penalty charges and exit fees can outweigh the benefits of clearing the mortgage early, and the last thing you want is to lose money while trying to save money.

Recommended reading for mortgage hunters: 

• Mortgage deposit gifts
• How much does a mortgage broker cost?
• Can you build on the green belt?
• Shortest term mortgage in the UK
• Buying a warehouse in the UK
• Porting a mortgage explained
• Transferring a mortgage

Can you remortgage after paying off your mortgage?

Yes. When you own the property outright, you’re in a better position, usually called mortgaging an encumbered property.

Since you own all the equity in the property, you’ll be attractive to lenders and can access better deals with competitive rates and terms.

Full ownership also provides more security. If you default, the lender can quickly recover the debt by repossessing and selling the property without other lenders preventing them from settling the debt.

What happens after paying off an interest-only mortgage?

With interest-only mortgages, you only repay the interest on the loan over the loan period and then repay the original capital at the end of the term.

You can repay the capital using your savings, by remortgaging, or sell the property and use the proceeds to settle the debt.

What Happens After Mortgage Paid Off Final thoughts

Once you pay off your mortgage, ensure you get the necessary documents from the lender and use the extra funds you now have to think about your future through a pension or retirement plan.

You can also consider renovations and home improvements, vacationing or settling other debts.

Buying your own warehouse can save money, especially considering what a year’s warehouse rental costs you.

A warehouse not only gives you access to cheaper rates but can also help build your business’s long-term equity.

If you’re thinking about buying your first warehouse, here’s what you need to know…

Consider Your Space Requirements

If you’ve rented a smaller warehouse before and are looking to rent a space that will accommodate your projected growth, consider looking for a building that is at least the same size or bigger to cater to the growth of your business.

When looking for a warehouse, you should consider the size and functionality of the space.

Also, consider other features of the warehouse, such as the location of the cargo door, type of loading ramp, and accessibility of the location.

Once you’ve found something that’s suitable, put in an offer.

This works similarly to a home purchase (including putting down a deposit, conducting a survey, inspections, and an appraisal).

Warehouses are classed as Industrial B2, B8 or Class E, which covers warehouses and factories.

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Putting in an Offer to Purchase

Some borrowers take too long to decide on a property and lose out.

Keep in mind that property sales can fluctuate throughout the year.

Properties may sell fast in one quarter and much slower in others.

It’s best to keep an eye on the market to know how to behave when you find the ideal warehouse or commercial property to buy.

If you’re looking for an in-demand property and find the perfect space, put in an offer to purchase as soon as possible.

The seller will have an idea of what they want for the property in mind. This is what they expect, but it’s by no means what you have to offer.

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You can determine how much you want to offer on the advertised property. The owner can then decide yes or no.

If you’re willing to take the risk of a turn-down, you can offer a rate that’s a few thousand pounds less than advertised.

Those not willing to take risks will offer the requested amount or close to it.

You only start applying for mortgages once the owner accepts the purchase offer.

When you’re ready to put in an offer to purchase, both parties will do due diligence, which includes searches for:

• Local authority.
• Environmental and flood risk.
• Drainage and water.
• Highways.
• Chancel.

While you may be excited to get a warehouse mortgage, never be tempted to rush the due diligence process.

It is up to the buyer to provide evidence of any relevant faults with the property.

How Do I Get a Commercial Mortgage in the UK?

Commercial loans are very different to home loans. They are much harder to get, and lenders tend to be far more selective.

Even when you find a bank willing to give you the loan, the interest rates may not be as good as you would like.

If you want a good rate on your warehouse loan, you should talk to a mortgage broker with experience in the market.

Brokers have connections with many different banks and financial institutions and know how to find the best possible finance solution for you.

Need more help? Check our quick help guides: 

• Reasons why a mortgage could be declined on affordability. 
• How reliable is a mortgage in principle?
• How do joint mortgages work?
• Can you get a mortgage on a fixed-term contract?

Official Paperwork Gathering & Processing

Getting the paperwork right during the buying process is important.

Banks have requirements when providing finance for purchasing property, and of course, there are legalities to exchange certain documents when the sale goes through.

It can be a complicated process if you have never done it before.

Some buyers opt to handle the paperwork themselves.

In instances like this, a professional solicitor or licensed conveyancer will need to be hired to ensure the sale’s legal aspects are correctly managed.

Lenders will require property checks to ascertain if the property’s value aligns with the loan amount requested.

A survey is usually done to assess any possible problems existing on the property, determine its condition and determine if the structural aspects are stable and safe.

Apply for a mortgage today

Sign the Contract & Exchange With the Seller

Once the paperwork has been submitted and the seller has accepted your offer, the solicitors must first be happy, and then the contract can be signed and exchanged with the sellers.

It’s at this stage of the process that the deposit for the warehouse must be put down.

Once the deposit is paid, there’s no backing out of the deal, as you may face negative ramifications with the lender (and other lenders) in future.

Once this is done and all details are verified, you’re given the keys to the property – you now have your own warehouse!

But wait, you’re not quite done yet. There’s more!

At this stage, there are still fees to pay on the balance of the property cost, the stamp duties, the conveyancer or solicitor fees, and any removal costs that may have racked up.

What’s next?

Of course, the next steps involve ensuring that you manage your finance contract strictly according to the terms of your mortgage agreement, or you could find yourself heavily penalised, the property repossessed, and negatively impacting your credit record.

Your warehouse will undoubtedly earn you more freedom to carry out your business proceedings as you see fit and also help you capitalise on new growth opportunities.

Apply for a mortgage today

Buying a Warehouse Last Word

If you’re tired of helping someone else make money on the property you use for your business, consider buying your own warehouse or commercial property with the help of a professional mortgage broker on your side.

Then, hunt the market for the ideal deal and move your business into a warehouse that supports business operations and promotes the growth of the business over the long term.

There are plenty of benefits to owning your own business premises, including cost savings.

Further reading: 

• How much does the average mortgage cost?
• Modern method of auction 
• What mortgage can I get for £500? 
• Mortgages for discharged bankrupts

Not many people in the UK will tell you that they opted for the shortest-term mortgage available in the UK, and that’s because they’re not entirely affordable to every borrower.

That said, Brexit and an apparent lack of trust in the housing market from consumers are making the housing market a little unstable.

For the wealthiest investors, short-term mortgages provide some stability and investment protection – to a degree.

For most, now is the ultimate time to grab the chance of getting short-term fixed rates or short-term mortgages. Unfortunately, while most may want it, not all can afford it.

In this overview, we look at short-term mortgages, their benefits, the eligibility requirements and how they stack up against fixed-rate mortgages.

We also cover the benefits of fixed-rate mortgages and the eligibility requirements to apply for one.

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What Are Short-Term Mortgages? 

If you think about a short-term mortgage, what comes to mind? Most would think it’s a mortgage that’s held over a short period.

But most also think the mortgage amount is far less than a “standard” mortgage.

Here’s the truth. Short-term mortgages are “standard” mortgage amounts paid over a far shorter term than a standard mortgage.

Most people in the UK pay off a mortgage over what feels like a lifetime. Short-term mortgages are quite contrary.

If you’re looking for a short-term mortgage, they don’t get any shorter than 5 years.

This type of short-term mortgage is commonly selected by those who can pay high monthly instalments.

Of course, the reason behind this is to avoid interest.

Fixed-rate mortgages give borrowers peace of mind that they can plan effectively even with fluctuating rates.

Need more help? Check our quick help guides: 

• Reasons why a mortgage could be declined on affordability. 
• How reliable is a mortgage in principle?
• How do joint mortgages work?
• Can you get a mortgage on a fixed-term contract?

What Are the Benefits of Short-Term Mortgages?

If the idea of a short mortgage period scares you when you consider the size of your mortgage, you might wonder if there are any benefits involved for the borrower opting for one.

Of course, there must be viable and very high-value benefits to opting for short-term mortgages, or people wouldn’t put themselves under financial pressure.

One of the major benefits is that short-term mortgages minimise the interest payable.

It also helps to foresee how the fluctuating market will affect the property and financing.

For instance, predicting how the housing market will look in around 2 to 3 years is simpler, enabling investors to avoid the negative impact of market changes.

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Eligibility Requirements for Short-Term Mortgages?

Are you eligible for a short-term mortgage, and if not, why not? Not everyone can afford to borrow a mortgage and pay it back quickly.

This type of mortgage is specifically aimed at those with a stable financial situation. And for these people, two eligibility requirements come into play:

1. Enough equity.
2. Enough capital.

Sounds simple, right? If you’re a wealthy investor, surely proving this affordability is simple, right?

Not quite!

You may think it would be a simple task to prove capital and equity in abundance, but it can be quite tough when a very short turnaround is required.

As such, it’s a mortgage option most often selected by wealthy individuals, landlords, and property developers.

Capital has either been gained through business or long-term life savings.

Why the switch from long-term mortgages to short-term mortgages for some? Is there a deeper underlying reason?

The reasons are pretty obvious, for those who have a good financial understanding, that is.

Long-term mortgages can frustrate borrowers, especially with all the required credit checks.

When short-term mortgages are in play, the tedious task of credit checks could possibly be avoided.

As short-term mortgages are paid off pretty quickly, lenders consistently don’t need to get updates on high equity borrowers.

As a result, short-term loans are the ideal option if you’re a high equity borrower interested in investing without accumulating debt.

That said, it’s evident that short-term fixed-rate mortgages are just as viable.

So what are short-term fixed-rate mortgages?

If you’re not familiar with these mortgage types, read on.

Short-Term Fixed-Rate Mortgages – The Benefits 

What’s the drawcard when it comes to short-term fixed-rate mortgages? Is there one? It’s all about saving money in the long run.

When interest rates fluctuate, you will enjoy more stability if you have a short-term fixed-rate mortgage. Let’s take, for example, a mortgage that spans 35 years.

With this type of mortgage, you can select a fixed rate for a certain period that is usually available in 2, 3, 5 and 10-year increments.

Once the set fixed-rate period has lapsed, the borrower can agree on a new fixed rate term with the lender providing the funding.

You could remortgage too or transfer onto the standard variable rate offered by the lender. These fixed-rate periods protect the borrower from interest rate spikes.

It’s a good idea to discuss your financial situation and ideas with an experienced mortgage broker if you feel inspired to pay back your mortgage in a super short term or protect yourself from spikes in the interest rate.

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Eligibility Criteria for Fixed Rate Mortgages

Fixed-rate mortgages have eligibility requirements varying from one lender to the next.

These include:

• Borrowers applying must have a good credit record.
• Applicants must be financially stable – and prove affordability.
• Applicants must be between the ages of 25 and 85 years old.
• The minimum annual income of the applicant cannot be less than £25,000.
• Applicants must be able to put down a 25% deposit.
• The property in question must show obvious potential value and be suitable for renting out.

A word on deposit sizes: While the average requested deposit is 25% on short-term loans, some lenders ask for a 40% to 45% deposit. The larger the deposit that is put down, the lower the overall rates will be on the property finance. In addition, a higher deposit makes it easier for bad credit or no credit borrowers to get approved.

Quick help mortgage guides: 

• Best offset mortgage rates UK
• Can you get a mortgage 7 times your salary?
• Contractor mortgages
• Best lifetime tracker mortgages
• Expat mortgages
• Mortgage repayments on a 300k a month mortgage

Apply for a mortgage today

Shortest Term Mortgage Last Word

If you’re in the financial position to pay off your mortgage in five years, considering the various benefits of the shortest-term mortgages in the UK may be in your best interests.

Of course, you should consult a professional mortgage broker before making such a big decision.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading: 

• How much does the average mortgage cost?
• Modern method of auction 
• What mortgage can I get for £500? 
• Mortgages for discharged bankrupts

Sometimes the best business investments are simply overlooked because most people never think about them.

On the other hand, some investors make great investment decisions because they look where no one is looking for opportunities.

One such investment opportunity is building on green belt land.

That said, while building on the green belt may be profitable, it’s important to be aware of its various regulations.

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What is Green Belt Land?

The ‘green belt’ is a term used to describe UK-protected countryside and open space.

Government policy also uses this to describe areas of land that should be protected.

It is not given to individual pieces of land but rather large sections of connected space surrounding towns and cities.

The idea of having green belt land was first considered in the 1930s but was only set in place by local authorities with the passing of the Town and Country Planning Act of 1947.

The National Planning Policy Framework determines that the green belt legislation was implemented for five simple reasons.

The legislation is purposed with:

1. Ensuring there is no risk of large built-up areas unrestricted growth.
2. Preserving the unique characteristics of historic towns.
3. Creating a barrier between towns, preventing them from merging.
4. Protecting the countryside from encroachment.
5. Encouraging the recycling of derelict and other urban lands for urban regeneration.

While some love to hate greenbelt areas because they restrict the growth of building development, most still agree that the five objectives listed above are important and must be adhered to.

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Where to Find Green Belt Land

One of the purposes of setting green belt areas aside is to prevent urban sprawl from eating up the countryside.

Unsurprisingly, some major green belt areas are on the outskirts of the major cities: Birmingham, Newcastle, London, and Manchester.

Green Belt vs Greenfield Land – What’s the Difference?

Green belt land has tight restrictions to protect it against unnecessary development.

Greenfield land is different because it is a space that’s never been built on previously and, in most instances, is used as grassland or for agricultural purposes.

It’s not uncommon for people to confuse the two. But greenfield land is less protected than green belt land.

Am I Allowed to Build on Green Belt Land?

If you want to build on green belt land, you must be prepared to get planning permission beforehand, as the level of protection in these areas can be quite high.

That said, it is still possible to build on green belt land. And because of this, investors have asked Government to clarify which areas are green belts.

As it turns out, some aren’t entirely sure what is and what isn’t green belt land.

People often get confused because they believe that green belt land has agricultural or ecological value or protects wildlife.

This, however, is not the truth. Green belt areas are purely to limit development and don’t have to have any value to offer other than that.

Green belt development regulations should be understood before you think about carrying out any property development in those areas.

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Building on Green Belt Land – Rules & Regulations

The first thing to be aware of is that you cannot build on green belt land on a whim.

For local planning authorities to authorise it, the circumstances must be exceptional.

In most instances, any development in green belt land is banned.

• Sports and recreation facilities (outdoor)
• Agricultural buildings
• Replacing an existing building for the same use
• Alterations or extensions to current structures
• Provision of affordable housing

The Ministry for Housing, Communities and Local Government published the expected guidelines for protecting green belt land in 2018.

These guidelines stipulate that the need for affordable housing in a community is not a suitable enough reason to get building approval.

An official assessment will be carried out with the following in mind:

• Flood risk
• National parks
• To provide sites for scientific interest
• Areas of outstanding natural beauty
• Heritage coasts and heritage assets
• Protected sites

It must be stated that it’s no easy feat getting planning permission to build on green belt land, especially if you’re hoping to build multiple properties.

It’s interesting to note that the guidelines state that one-off, isolated homes may be allowed if they are of exceptional quality that deems them outstanding or innovative.

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Quick help mortgage guides: 

• Best offset mortgage rates UK
• Can you get a mortgage 7 times your salary?
• Contractor mortgages
• Best lifetime tracker mortgages
• Expat mortgages
• Mortgage repayments on a 300k a month mortgage

Increase in Building Projects Approved in the UK Green Belt Land Areas

The local authorities received applications for 35,000 homes in the green belt area in 2020.

While not all were approved, it is good to note that 24,000 structures have been constructed in green belt land in the UK over the past 10 years.

However, 35% of the green belt is still reserved for agricultural operations.

There’s a bit of controversy over approving some building permissions in the green belt land areas.

Some believe that the Government is trying to keep up with new build property targets and the “exceptional circumstances” clause makes it easier to get approval – in some instances.

In most instances, “brown field sites” are prioritised for development. Brown field sites are areas that were previously used for industrial purposes.

Green belt boundaries previously set in place seem to have been extended to create a little—more room for housing development.

And this is where it benefits investors who want to invest in property development in a non-mainstream way.

Building on the Green Belt Last Word

Property investors interested in new investments and opportunities for unique developments should consider looking into building on green belt land.

Despite the hassle it can be to set the planning permissions in place, it may be well worth your time.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Further reading: 

• How much does the average mortgage cost?
• Modern method of auction 
• What mortgage can I get for £500? 
• Mortgages for discharged bankrupts

Mortgages aren’t just intended for the purchasing of property.

Borrowers can use them to purchase land.

That said, it’s important to note that getting a mortgage to buy land is an entirely different ball game from purchasing a property.

This guide explores the details of buying land and how to get quality mortgage advice.

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Can I Apply for a Mortgage Purely to Purchase Land?

Yes, this could be possible via a land mortgage, a financial product designed to purchase plots of land.

How Does Getting a Mortgage to Purchase Land Work?

Land mortgages are loans for raw, undeveloped, or lease-hold land parcels.

They’re most commonly secured by agricultural land but exist on everything from rural land to commercial use plots and industrial buildings.

If you already own a parcel of undeveloped land – or don’t – but want to build commercial real estate, you’ll need to get a mortgage.

Therefore, there is a huge variety in land mortgages depending on where you’re buying and what you propose you have in mind for the developed land.

Land mortgages are a lot like standard residential mortgages, but there are a few differences that you should be aware of.

That’s because this corner of the market is more specialised, and fewer lenders offer land loans than those offering typical mortgages for the property.

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What Deposit is Needed When Purchasing Land?

For land mortgages, the minimum deposit is usually much higher than that for typical residential property.

The minimum deposit required will vary depending on the type of property you are buying and what kind of use you intend for it.

In general, those buying a plot for building a home will typically be charged a higher minimum deposit than those buying a plot simply as an investment, for example.

The exact sum will depend on various factors related to you and your plans – the lender’s policy, the value of your land, the type of property you wish to use the plot for, and so on.

In most instances, the deposit is a 30% minimum.

Is it Possible to Get a Mortgage for Land without a Deposit?

It is sometimes possible to get a mortgage without a deposit, but that doesn’t come without its downsides.

It’s worth remembering that some lenders will require you to have some sort of security, including personal assets like property.

If you’re able to, use it! Otherwise, you may have to borrow against your assets, leaving you more vulnerable.

What Do Land Mortgages Cost?

There are several factors that affect land mortgage interest rates.

This includes your credit history, the amount borrowed, amount of equity in your property, closing cost, and reverse mortgage option, just to name a few.

• Location – more sought-after areas come with higher costs.
• The industry you operate in.
• The applicant’s credit history.
• The intended purpose of the land – will the intention be considered risky to the lender?
• Trading history of the business.
• The loan to value rations and the status of the land – whether there is an outline or full planning permissions in place.
• The amount you wish to loan.

Tips to Ensure You Get the Best Rates on Land Finance

•  Work on Your Credit Status

Take the time to improve your credit score by reducing costs, managing your accounts according to the agreements in place and always paying on time and in full.

•  Apply for Secured Finance with Collateral

If you have a valuable asset such as property or a vehicle and opt to use it as security for your loan request, the lender will see you as less risky.

Of course, if you default on your repayments, your asset will be sold by the lender.

•   Offer a Larger Down Payment than Required

If you offer a decent deposit amount, your risk level will be perceived as lower.

•   Reduce Your Monthly Expenses

Affordability assessments are the norm, and lenders typically test to see if your finances will survive future rate increases.

You can improve your creditworthiness by looking at your current expenses and cutting unnecessary ones.

•   Consult with a Land Mortgage Broker

A great deal of value can be derived from speaking with an industry specialist with specific interests and experience in land mortgages.

This is the best way to ensure you get the best possible rates on a land mortgage.

Is it Possible to Get a Land Mortgage if You Don’t Have Planning Permission?

Yes, but you may find it a lot trickier to borrow money, as some lenders just won’t lend for land purchases without planning permission at all.

A bank will usually lend you money to buy a property only if it has planning permission.

Moreover, certain types of property people consider hard to get permission for.

The fact that getting approval for planning can be complicated can be problematic for buyers who are looking to get a mortgage.

A mortgage can be denied to a home buyer if the building plans aren’t approved or if there is a condition attached by the local authority that an owner must live up to before permission can be granted.

Planning permissions in place usually provide lenders with more certainty.

Most lenders, particularly traditional banks, will expect you to put up collateral, and for them, this is usually the most valuable asset you own—your home.

In most instances, borrowers are offered a smaller LTV – around 65%.

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Getting Planning Permission

It’s always best to check with the local authority if planning permission is required.

You can apply online through the UK government website for planning permission.

You won’t be able to do a lot with your property until you have planning permissions in place.

In most instances, planning permission is required for:

• Buildings on the property.
• Carrying out modifications to the existing property.
• Changing what the land is currently being used for.

Alternative Options When Looking for Land Finance

You can try several alternative funding options when looking to finance land – these include:

• Bridging loans – high rates and lenders require an exit strategy.
• Development finance – 70% to 75% of the purchase cost offered and 100% of construction costs covered.
• Commercial mortgages – capped at an LTV of 50%.
• Self-build mortgages – specifically for buying property and building houses–usually have higher interest rates.
• Agricultural mortgages – reserved for purchasing land that’s set to be used for agricultural purposes.

Land Finance Last Word

Finding the right finance for land purchase or redevelopment can be hard, time-consuming work in a small, specialised sector.

Simply put, there are fewer land mortgage lenders; many are harder to find, and some only operate through mortgage brokers.

Whether you need a bridging loan, a mortgage or both – the best way to succeed with your financing is to work with a mortgage broker who knows all there is to know about land mortgages.

They can find the perfect lender for your needs and circumstances.

Developing property can be an exceptional investment if you’ve done your homework and got the right funding.

That said, where do you go for funding and which professionals in the finance industry are best suited to assisting you?

If you have no prior experience with seeking funding for development, you may think that you should acquire the services of a regular mortgage broker, but it’s not that simple.

If you’re considering development finance, always get expert advice first. The market is tricky, and most brokers are inexperienced with this area of lending.

This can lead to you missing out on the best deals available.

Even after you’ve looked at all the options, you may still be unsure which would be the most suited to you, which is why you should speak to a professional to gain more clarity.

Development finance loans from top whole-of-market advisors can be assessed and recommended based on individual circumstances and the loan provider with the relevant experience and know-how to offer the best deal.

There are both residential and commercial development finance brokers on the market.

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Property Development Finance Brokers Guide

What You Need to Know About Residential Development Finance Brokers

As most development finance loans are organised on an unregulated basis, you need to be able to tailor the loans to meet the needs of each company or project involved; that is, they often involve a combination of loan types.

Many mortgage brokers specialise in arranging different types of finance – such as investing in property – but do not have experience in the more complex deals required where there’s a combination of mortgages, loans and deposits due to how each is set up.

Specialist advisors can provide the assistance you need in complex situations, giving you peace of mind that you don’t have to stress and fret over the details.

Simply take the advice of your specialist development finance broker, and the process will go forward smoothly.

As a consequence of tougher FCA rules governing residential development mortgages, the lenders who provide them often require caveats (or guarantees), including a maximum term of one year.

If you’ve found a residential lender, ask them about whole-of-market options.

A lender specialising in this area may offer the flexibility you’re looking for. Just make sure that you have an exit strategy in place that’s viable.

In addition, should you choose to build the property yourself, homebuyers who find a property with the desired features or one with the potential for compelling future development may also find that a self-build mortgage is an equally valid option.

If not more valid. Take the time to chat with industry experts to help you find the best possible lender for your specific situation and circumstances.

What You Need to Know About Commercial Development Finance Brokers

‘Unregulated’ lending is essential for commercial loans, as they usually need to be bespoke and structured according to the needs and financial situation of the borrower.

If you know that you need to acquire funds to construct a business property, then it’s highly recommended you source commercial development finance brokers.

These specialists can help you obtain the funds and secure a highly competitive deal while providing expert advice and paring you with lenders specialising in the required products.

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Several Types of Development Finance Brokers You Might Find Useful

You can get development finance brokers for:

• Bad credit brokers

If bad credit puts the exit strategy at risk, it may be a deal breaker for your development finance deal.

A specialist development finance broker can assist you in getting the right deal without your level of risk being incorrectly assessed.

• First-time development brokers

Lenders may turn you away if you have a poor credit score.

However, a strong credit record is often the way to secure the best rates.

Specialist advisors can help first-time developers access competitive rates if it’s your first development.

• 100% LTV brokers

Most development funding providers will cover  70-75% of the funds for the initial purchase of an empty property and then offer to lend 100% of the costs required for the development, with the funds released at certain stages.

Specialist brokers can often arrange 100% funding outright if they’re approached by borrowers who can provide additional security in the form of an asset, and even sometimes in cases where borrowers are willing to strike a profit share deal with the funds provider.

• International

If you’re hoping to develop in Australia, the US, and some places in Europe, you will be happy to discover that some development finance providers offer to fund internationally.

This is why you want to work specifically with development finance brokers who can connect you with the right finance providers for your unique development

What Do Development Finance Brokers Charge?

It’s important to understand that in addition to interest, arrangement, valuation and other costs, development finance borrowers will also charge you broker fees.

In most cases, this broker fee will be a percentage of the total facility – usually between 1% and 2% of the loan amount.

Some brokers charge a fee to list a property on their books, but the fee is non-refundable, make sure you discuss that with them at the outset.

The last thing you want is to pay fees for a service they cannot provide and never get your money back.

Expert development finance brokers are also in your corner by ensuring that you’re not surprised by hidden charges.

In addition, they will ensure that the charges are entirely transparent throughout the process.

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Development Finance Brokers Last Word

Just like you wouldn’t take your car to get fixed at a lawn mower repair centre, you shouldn’t try to apply for finance with the assistance of the wrong type of broker.

Property development finance can be quite complex, and if you want to ensure that the process is simple and drama-free for you, using a specialist development finance broker is the way to go.

In a perfect world, spray foam insulation is a great way to protect your home from the cold.

Unfortunately, as it has been on the market for about 30 years, many people rely on it to keep their homes warm.

But, it can cause serious issues when you want to finance your property, whether you want to remortgage, buying a new home, or applying for an equity release product.

It is often sold as a higher-performing insulator than mineral wool; spray foam is used in thousands of homes, in wall cavities, lofts, and flooring.

The problem is that some mortgage lenders and most equity release lenders won’t touch properties with spray foam insulation because of all the problems it can cause.

Now I’ll explain why mortgage lenders won’t approve an application if it’s a property with spray foam insulation and how to solve this home loan problem.

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Getting a Mortgage with Spray Foam Insulations

To understand why your potential buyers get put off when trying to buy a property that has spray foam insulation, first, we’re going to look at what spray foam insulation is.

Spray foam insulation is a chemical product made from two materials called isocyanate and polyol, which react when mixed. It expands to 30-60 times its liquid volume after spraying.

Here are some concerns as to why it’s difficult to get a mortgage if a property has to spray foam insulation:

• Spray foam can cause roof timbers to rot.
• The lack of airflow can cause mold to form, and it can have toxic release odours.
• Spray foam can also devalue your home because you would have to buy a new roof since the spray foam can cause so many problems to the roof.

It can cause a lot of problems, and it can affect your mortgage.

Whether it is closed or open, cell foam is found in your roof; most mortgage companies and banks may not consider lending on a property with spray foam insulation.

Different Spray Foam Insulation

Not all is lost if you want to remortgage your home with spray foam insulation or take out an equity release mortgage.

Here is the first step to identifying the spray foam insulation type.

• Open-cell spray foam insulation, known as half-pound foam, ocSPF, or light-density open-cell SPF, has a sponge-like appearance. The SPF expands during the installation, so the ocSPF can fit in most cracks and crevices.
• Closed-cell spray foam, commonly known as medium-density closed-cell foam insulation, ccSPF, often referred to as two-pound foam, sets rigid, preventing air or moisture from entering your home. It is more stable but more expensive to remove than the original insulation.

If you want to remortgage, removing spray foam insulation is possible.

It’s still important to note that some lenders might still not approve your application, depending on how long the insulation has been installed.

Removal isn’t an easy job because the spray application gets into every nook and cranny.

If the insulation has been installed for a few years, a mortgage lender might decide that it’s too much of a risk and, likely, the damage has already been done.

It’s important to seek professional advice before making such a big decision.

A limited number of lifetime mortgage lenders will consider properties with more impressionable open-cell spray foam.

This includes a requirement for the open-cell spray foam insulation to have been applied during construction, as long as it is the Icynene product, with a guarantee and BBA approval.

Before applying for any mortgage, it is worth investigating exactly what spray foam you have installed in your home and check back on your contractor’s paperwork.

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Mortgaging a Property With Spray Foam Insulation

Now we understand the problem, let’s see what solutions there are.

Because contractors still recommend spraying foam insulation, it’s not a very uncommon issue but one that needs a careful approach.

Since a lot of people still make the mistake of installing SPF, here are an indication of potential strategies:

• If you have open-cell SPF, then it is best to consult an experienced broker. Some lenders will reconsider mortgage lending or offer an equity release on this type of property. The choices are extremely limited, so they must approach this very carefully.
• Closed-cell Spray foam insulation can be removed – but note that this will be typically more expensive than the original insulation and may not cause the financing issue completely.
• Replacing the whole roof can solve your problem, but it’s not a low-cost solution. However, a roof doesn’t last forever, and replacing the spray foam at the same time is a good bet.

If you are interested in buying a house with spray foam, there could also be less common alternatives you can use.

For example, if a mortgage lender will not consider approving a mortgage application against the property, even with mortgage retention, but a bridging finance lender might.

On the other hand, Bridging loans are expensive, meaning it has higher interest rates, but they’re also a lot more flexible.

For example, developers use bridging loans to cover the cost of purchasing and renovating properties that aren’t eligible for a standard mortgage product.

But you would need to demonstrate how you plan to repay the loan through a remortgage once the spray foam has been removed, so you would need an agreement to support your application.

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Equity Release, Mortgages, and Spray Foam Insulation

Lenders rarely give any definitive guidance on their policy toward spray foam insulation, so it is impossible to know whether they are going to approve a mortgage or equity release without advice from a broker.

Most mortgage lenders rely on the survey to identify the insulation present and use that evaluation to make a decision; some lenders and Equity Release providers refuse to lend against properties with spray foam insulation.

We would still strongly advise against ever-fitting spray foam insulation in your home because of all the disadvantages that can come with it.

However, suitable mortgage options are available to meet your requirements, although Equity Release can be a problem, especially with the closed-type spray foam.