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Maren Somerset Webb
Podcasts Radio News hello listeners, Merytt and Somerset Webb here. I just wanted to remind you that if you are enjoying our weekly podcast, and I hope you are, you will also probably really enjoy my weekly newsletter for Bloomberg subscribers. It hits inboxes every Saturday. This past week I wrote about why the similarities with the 1970s and the 2000s should have you just a little bit worried. So check out the link in the show notes on how to subscribe to the newsletter. It does mean signing up for a.com subscription, but I promise you it is worth worth it because you will also get access to John's Money Distilled newsletter and informative and actionable stories from more than 2,700 journalists worldwide. Right onto this week's show. Welcome to marantalks yous Money, the personal finance edition of marantalks Money. In these bonus podcasts, we talk about the best strategies for making the most of your money. I am Meryn Somerset Webb and with me as ever, senior reporter and Money Digital author John Steffek. Hi.
John Steffek
Hi Mil.
Maren Somerset Webb
Right. We are on to one of our favorite topics. Well, really house prices is our favorite topic, but we're actually going to revisit mortgages, which is connected to our favorite topic and of course, dear to all of our hearts. For those of you who are new to the show, last spring we published an eight part series on how to buy a house in the uk which I strongly recommend by the way. But since then the landscape for interest rates in particular has changed drastically. So we thought it was worth revisiting this topic and looking at questions like what is the best type to get now? Who has the best rate? What's most important when trying to choose the best mortgage for you? And of course also is now really the best time to buy a house at all? To help us with that, we welcome back to the show, Anthony Emerson, director at Trinity Financial. Hello Anthony.
Anthony Emerson
Hi Maren, how are you?
Maren Somerset Webb
Good, thank you. And thank you for joining us again. We really appreciate it. Now you've already heard me say the questions I'm going to ask you, so why don't we just start. The landscape has changed a lot since we last saw you, last spoke to you. Do you want to run us through what's been happening?
Anthony Emerson
The landscape has changed dramatically. I mean, last time we spoke we were on a journey where we were expecting one, maybe two bank of England base rate cuts. The inflation looked like it was a little bit more in control and then it's flipped entirely on its head. And we are now in a position where the Iran war has created an immediate surge in the interest rates that are available to clients. We saw the within a two week period an increase of around about 1.2% in the cost of borrowing, which is exactly the opposite of what we were hoping for.
Maren Somerset Webb
Yeah, 1.2 percentage points. So up from what was it before, what was a sort of classic two year fix before the war began.
Anthony Emerson
The lowest rates on available at the point where the war started was around about 3.6 and then that jumped up to 4.7 as the sort of best rate option that was available. And that was where a stonkingly high 40% deposit.
Maren Somerset Webb
Wow. If we went out today with say a classic 10% deposit looking for a two year fix, what would we end
Anthony Emerson
up paying at the moment? Just short of 5% and that. I mean, the interest rates went up by sort of 1.2 where everything was in excess of 5%. But then since then we've seen a little bit of a softening as the swap rates have edged downwards a little bit and I think the uncertainty caused lenders to over compensate for the uncertainty. And then as things have sort of panned out and they've got more of an idea of how it's going to affect, we've had the rates come down a little bit, round about sort of 0.2 of a percent. So we still that 1% higher. The lenders, bless them, are doing absolutely everything they can to try and get us into the properties that we want. I mean, we've seen more and more lenders these days change their affordability calculations. So we've now got more lenders lending five and a half times your income, even up to six times your income for certain people. And, you know, we have really reached that inflection point still where that whole debate about rental versus owning on a month to month cost basis is if you're young and you've got a deposit, it probably makes sense for you still to buy a house than it is for you to rent.
Maren Somerset Webb
Really.
Anthony Emerson
It does, yeah.
Maren Somerset Webb
And it's not getting a little closer with these prices. I mean, I always think when you see, when you see a lender prepared to offer six times income in a dodgy economy with very low growth in real wages, particularly in the private sector, it makes me feel nervous that maybe they've relaxed those affordability measures a little too much.
Anthony Emerson
I can totally see where you're coming from on that. But the problem is the Renters Reform act has also kicked in now, which is meaning that we've got more and more landlords leaving the sector and that means that we're going to have less rental properties available, which is going to drive the prices up. It's going to have completely the opposite sort of effect that maybe the government wanted. But it is definitely going to mean that renting is going to get more and more expensive as we move forward.
Maren Somerset Webb
Interesting. So you'd expect buying to become more affordable, prices to come down, and we've seen certainly a collapse in house price growth and we're seeing falls in absolute nominal terms in quite a lot of areas now, particularly in London. And you'd expect that to continue partly as a result of this rental reform?
Anthony Emerson
I think so. I mean, we've seen that flats in particular which were the vast majority of the rental stock. A lot more stock is on the market and therefore those prices are being pushed downwards because of the supply and demand imbalance. You can probably pick up a fairly decent deal in the rental in, in a flat market at the moment than you could maybe compared to a year or two ago. That means that obviously if you are a starter first time buyer, there is probably a couple of good deals out there which will make sense. And obviously the bigger the deposit you've got. You know, we're looking at rental properties. If you bought something at circa 600 odd thousand and you were, you know, in your early 30s, you could probably get a mortgage costing you around about two and a half thousand pounds on a capital repayment basis, even at 90% loan to value. Now those sorts of properties from what we've seen are renting for around about two and a half thousand pounds. So it's quite equitable. But obviously in your capital repayment mortgage there is an element of capital repayment which you are getting back over the course of time.
Maren Somerset Webb
Yeah. So that whole thing can still work. So do you think that rates have settled for now?
Anthony Emerson
Who knows? At the moment we've had a couple of lenders just this morning saying that they're reducing their rates, but when I say reducing, they're only coming down by 0.05 of a percent. So it's very, very nominal. We are very nervous about the fact that inflation is a sort of rearward looking metric and we are yet to see the full effects of inflation and the pressures that that puts on everything else come through in the figures. So we think that, you know, the cost of fuel, fertilizer and all the other bits and pieces is really going to come to the fore in the next couple of months and you might see rates remain at this sort of level for a while while they wait for more data to come through.
Maren Somerset Webb
Okay. I mean, I suppose that the question that I know that everyone wants to ask and if I hadn't interrupted John, I think he might have been about to ask it, sorry, John, is if you need to remortgage in the near future, do you do it now or do you wait? And from what you've just said, it rather sounds to me like you would say do it now because these inflationary effects are still to come.
Anthony Emerson
We have this conversation with people all the time where they think that you need to wait to be able to secure something. You can remortgage your property if you're up for remortgage. Up to six months earlier than your expiry dates of your current product. If the rates improve from that point going forwards, you can always ditch the application that you've made either with your existing lender or with a new provider and then reapply for a new rate or new product or whatever it might be going forward. I'd much rather clients are prepared and get their mortgage set and settled six months ahead of time and then every month catch up with their mortgage broker to kind of say, let's have a look at the market again. Has it improved? Should we make another application for something cheaper? Too many people are leaving it right to the last minute and if something goes against them, they may very well end up paying quite a bit more than they had to.
Maren Somerset Webb
I hadn't realized you could do that kind of rolling rearranging, had you John?
John Steffek
I was aware of that. I just would like to just double check. Are there any downsides to that, Anthony? Like for example, you don't have to pay the arrangement fee up front. There's no sort of non refundable costs involved.
Anthony Emerson
Generally speaking, John, you have lenders providing you with free valuation and free legal transfer nowadays and because of that we can secure something with no money down. The arrangement fee varies from product to product from free to 1500, 200 to 1,500 to £2,000 for each product. But you can opt to add them to the loan at the end when the mortgage completes. So therefore there's no money down from your side to be able to get in and do that application. And at least you have something in your back pocket which basically allows you to protect yourself from any upward increase in rates.
John Steffek
Yeah. So basically you should definitely do it. There is no downside to this, absolutely
Anthony Emerson
no downside other than the poor mortgage broker might need to do his job two, three, four times over.
Maren Somerset Webb
What about if you're, what about if you're buying, you're taking out a new mortgage and you say, you say you're looking for a house right now. Can you do the same kind of thing? Well, I haven't found a flat yet, but I'm definitely going to find one. Can I arrange a mortgage and then keep rolling that over or I can't arrange the mortgage until I've actually found the house.
Anthony Emerson
You have to have found a property first in order to make a full mortgage application. And at that point the mortgage offer comes out and as long as you haven't yet exchanged, we can keep reviewing the rate and changing the application accordingly. So if you Took out a mortgage application with Santander, for example, and the rate went from 4.7 to 4.5. We could ring Santander up, get a new mortgage offer issued, and they would issue a new mortgage offer at the lower interest rate. The reason that we say that you can do it up to the point of exchange is that once you've exchanged contracts, because you have to complete on a set day and a set timeline, it's very risky to go back to the bank and ask for a change to be made, because the bank has the right to reassess the entire loan under whatever their new basis is. So affordability might have slightly changed. The kind of property that you're after might have slightly changed. So there is a risk that the lender might pull the product at that point. However, generally speaking, it doesn't affect the, the client's application.
Maren Somerset Webb
Okay. So given the length of time there often is between an offer being accepted and exchange, it's worth getting your mortgage offer in as quickly as possible because it gives you this great optionality and that if rates go up, not your problem. If rates go down, you can renegotiate.
Anthony Emerson
Absolutely. That's 100% correct.
Maren Somerset Webb
Okay, interesting.
Anthony Emerson
And I think too many people, especially when it comes to remortgaging, really know that fact. And, you know, they, they wait and wait and wait, hoping for a better situation. Whereas you can do it as early as you want and then just review and review and review every month for the next five or six months. We can get a change of product up until the mid of the month before your rate expires. So if your rate expires in June, we can get you, you know, a change in product up to the 15th of May.
Maren Somerset Webb
Interesting, because I've been noticing that deals are taking longer and longer to go through than they were even a year ago because of chains collapsing in a very sort of olden days type way. So if you have that length, this
Anthony Emerson
is really useful information that's on the purchase side of things. Absolutely. Purchases the whole system and the way it works is somewhat archaic, but I don't really see it changing. We used to have the, you know, the implementation of that buyer's pack, which I thought would actually revolutionize things in a very positive way. Scotland manages to get everything sorted out before they put their house on the market. Can't really understand why England hasn't followed suit. You go to other parts of the world 28 days from the day you accept. After seven days it goes unconditional and away you go. So it's just a different way of looking at it. But change is something that most people don't like.
John Steffek
Well, one thing I was going to ask, and I think this is something a lot of people will be curious about now. So obviously the fixed rate has shot up to about 4 and a half, 4.7, 4.8%. You can still get a tracker around about 4 ish 4.1. Are you seeing people asking you for trackers and what's your general take on that?
Anthony Emerson
The tracker differentiation? I mean, I looked at interest rates in preparation for this. At 60% loan to value, for example, the tracker rate currently is 3.96, whereas the same product fixed rate is 4.42. So you're looking at nearly half a percent difference between the two products. Now that means that you could probably take two bank of England base rate increases before you reached the situation where your fixed rate would put you. Most of the truckers as well don't seem to have early repayment charges applicable to them. So it gives you more freedom to be able to make overpayments refinance at a stage that the market may have improved. And it really just comes down to what you as an applicant have as a risk appetite, because we have already somewhat priced into bank of England base rate increases. So it is highly likely that by the end of this year you will probably be looking at nearly four and a half percent on that tracker rate. However, if the rate then turns around and starts going downwards just as quickly as it went upwards, then you might very well find that product beneficial. If it keeps on going north, then that product is not as clever.
Maren Somerset Webb
Suddenly everyone has to be an expert on inflation, Right?
Anthony Emerson
Correct. And, and I think it, it's being used more by people who are expecting some sort of windfall, big bonuses, an inheritance, some sort of asset payout that they could then use that tracker rate and the flexibility that comes with it to make a rather large overpayment. Because when you're looking at interest rates at sort of four and a half odd percent, to achieve that as a net return in the market is a little bit more difficult than most people would like. So therefore we're seeing a lot more people reduce their, outside their mortgage lending because of the fact that it's got a guaranteed return, if you like.
Maren Somerset Webb
Yeah, well, the offset mortgage, are you seeing demand for that?
Anthony Emerson
Less, yeah, less and less popular, mainly because of the fact that it costs the lenders so much to administer it.
Maren Somerset Webb
Okay. So it's the lender who's finding it unattractive not the borrower.
Anthony Emerson
The borrower will generally find it quite attractive if it's used correctly. But what we see on our side is that offset mortgages are generally around about sort of 15 to 17% more expensive in rate than you'd be able to get a standard product for. Now, that means that you have to have that amount of money or more in your offset account at all points during your mortgage in order to be able to meet what you could have got on a standard mortgage. It's only if you've got more than that sort of 17 odd percent that you start to benefit compared to what you would have had on a normal mortgage. It works quite nicely for people who are capital raising because they're at the end of their fixed rates and they want to do a massive home renovation and all that money needs to sit somewhere while they drip it out over time. But you know, if you haven't got the right situation for the requirement for that, then it isn't a product that is as popular as you want as you might think. Most people who have that cash available try and pay off the mortgage with it.
Maren Somerset Webb
Yeah, okay. So this all seems relatively straightforward. We have no idea what's going to happen next in terms of interest rates. So you might as well get a deal on the table whether you are buying for the first time or whether you are remortgaging and just keep reviewing it up until the last minute and take it from there. But there's no point in sitting around waiting.
Anthony Emerson
I definitely wouldn't advocate that at all.
Maren Somerset Webb
John, I interrupted you again. Sorry.
John Steffek
No, this is a really minor point, but one thing I have noticed and sort of keeps occurring to me is that whenever we used to talk about the property market prior to the financial crisis, there was basically no such thing as a setup fee or there were an awful lot of free mortgages. And now set up fees are, as you say, they seem to start at about a grand and go as high as 2. What do you say to people in terms of thinking about setup fees? What should you be looking out for? What do you need to consider in terms of how it actually affects the cost of the product?
Anthony Emerson
The setup fee basically comes down to mathematics, John. If the differentiation between a product with a fee and one without a fee multiplied by your loan balance over a two, three or five year period that you take the mortgage for generally will always, you know, would advocate the product with the fee if the savings are more than the cost of the fee. And as far as the fee is concerned, obviously we were talking earlier about, you know, the financial impact of applying for a mortgage. We never really advocate that a client pays for a value, pays for an arrangement fee up front, mainly because of the fact that if we change lender, you then have to go back to them and ask for a refund. And, and it's a little bit like dealing with hmrc. Quick to take your money but really slow to give it back. So I would say to you that, you know, you add it to your mortgage, but each one of the lenders generally has an overpayment facility allowed, which is 10% of the outstanding mortgage balance. So if you add the fee, best practice would be your first payment goes out, you ring the lender up, you make that thousand pound cash payment and effectively you won't be incurring any interest on that money, but you'll still be benefiting from the cheaper rate that that product gives you. We generally find the magic number seems to be around about 170 odd thousand because at that sort of level of loan size, the multiple between the rate difference means that paying the fee at £1,000 is either worth it or not. Once you go to 200, 300, £400,000 worth of lending, then generally speaking, the fee product worth taking.
John Steffek
Yeah, yeah, okay, that's useful thumb there.
Maren Somerset Webb
Okay, last question, last question. I'm going to ask you the impossible question away from mortgages. When you look at the property market in general, and I know that you just said that maybe there are good deals around, on, on flats for younger people who may be first time buyers, etc. But then there are all those worries about cladding, service charges, all that kind of thing around the edge, the, the uncertainty about what's going to happen with leaseholds, all these kind of things are all out there as uncertainties, but across the market as a, how does it look to you? And we've seen a lot of real terms, quite dramatic declines, particularly in London. Does it look to you like things are going to pick up from here or does it look to you from the business you're seeing that everything's going to stay a little uncertain for a while?
Anthony Emerson
I think the market is split in my opinion into three. You've got your super prime London properties, which very, very high values, lots of foreign buyers coming in and buying those properties or not, as it might be. They've seen a bit of a knock in confidence in pricing because of the fact that the government, the taxation structures, all the other bits and pieces work against them. Then you've got Your stock standard UK house, which for a family unit that seems to be quite strong and still achieving, in most cases it's asking price, if not over. And then you've got your third, which is your flats. Now, all those things that you mentioned earlier, the leasehold, the fact that your service charges are quite high on a lot of these new build properties and the like, and the uncertainty as to what's going to happen with the lease is leading to those properties being a little bit more uncertain and a little bit lower in price than we would have seen a couple of years ago. And I think that's also coupled with the fact that we are seeing so many landlords exiting the market, we've just now got an imbalance with an oversupply of properties. And that uncertainty is meaning that the demand is not there because the interest rates are a little bit higher. Given the Iranian war, if we were still in that position where the interest rates were closer to sort of three and a half, 4%, it might very well be a very different conversation that we're having now. Because like I was mentioning earlier on that inflection point where rentals and owning, you know, have got to this level, they kind of equal at this point. Whereas, you know, before the war in February, March, it was notably cheaper for you to be able to own a property to if you could, rather than rent it. So I think we are going to remain in a situation where flats are a little bit less in demand. And I think the flip side of that is that from what I noted, the, the builders aren't really building as much as the government wanted them to. They had a target of 1.5 million extra homes. For the most part, those builders are way under target and actually not pushing forward with new developments at the speed that they might that they thought they would have because of all these other issues.
Maren Somerset Webb
Yeah, yeah, okay. All right. Well, bit optimistic. Not that optimistic, John, anything.
Anthony Emerson
Family houses are going to do very well because, you know, the builders are building flats, they're not building houses.
Maren Somerset Webb
Yeah, yeah, yeah. John, anything else we should ask before we move on?
John Steffek
Don't think so. I think that will make perfect sense.
Maren Somerset Webb
Okay, brilliant. Thank you, Anthony. I hope that was helpful to anyone who's wondering about mortgages. But if you have more questions, do write in and let us know. Thank you, John. Thank you, Antony. Thanks for listening to this week's Maryn Talks yous Money. If you like our show, rate review and subscribe wherever you listen to podcasts and be sure to follow me and John on X or Twitter. I'm Maren SW and John is JohnStepek. This episode was produced by Sema Saadi and Moses Andam. Sound designed by Aaron Kasper. Questions and comments on this show and all our shows are always welcome. Our show email is marinmoneylumberg.net.
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Host: Merryn Somerset Webb
Guests: John Stepek (Senior Reporter, Money Digital Author), Anthony Emerson (Director, Trinity Financial)
Date: May 13, 2026
In this episode, Merryn Somerset Webb dives into the rapidly shifting UK mortgage landscape with guest expert Anthony Emerson from Trinity Financial and regular contributor John Stepek. With interest rates volatile due to geo-political and economic pressures, they discuss when and how to secure the best mortgage deals—whether you're remortgaging, buying, or choosing between fixed and tracker products. Discussion centers on why acting early and maintaining flexibility could save you thousands, and unpacks myths about timing, affordability, and the benefits of different mortgage products.
[03:57]
"Within a two week period an increase of around about 1.2% in the cost of borrowing, which is exactly the opposite of what we were hoping for." —Anthony Emerson [03:57]
[04:35–06:21]
"We've now got more lenders lending five and a half times your income, even up to six times your income for certain people." —Anthony Emerson [05:22]
[06:21–08:45]
[08:50–09:48]
"...the pressures that inflation puts on everything else...you might see rates remain at this sort of level for a while while they wait for more data to come through." —Anthony Emerson [09:48]
[10:08–14:41]
"I'd much rather clients are prepared and get their mortgage set and settled six months ahead of time and then every month catch up with their mortgage broker...Should we make another application for something cheaper?" —Anthony Emerson [10:08]
[12:17–14:02]
"...if rates go up, not your problem. If rates go down, you can renegotiate." —Merryn Somerset Webb [13:46]
[15:43–18:19]
"It really just comes down to what you...have as a risk appetite." —Anthony Emerson [16:07]
"If it keeps on going north, then that product is not as clever." —Anthony Emerson [17:17]
[18:19–19:44]
"Offset mortgages are generally around about sort of 15 to 17% more expensive in rate than you'd be able to get a standard product for." —Anthony Emerson [18:34]
[20:08–22:33]
"If the differentiation between a product with a fee and one without a fee multiplied by your loan balance over a...period...would advocate the product with the fee if the savings are more than the cost of the fee." —Anthony Emerson [20:47]
[22:37–26:15]
"Given the Iranian war, if...rates were closer to sort of three and a half, 4%, it might very well be a very different conversation." —Anthony Emerson [25:20]
"Too many people are leaving it right to the last minute and if something goes against them, they may very well end up paying quite a bit more than they had to."
—Anthony Emerson [10:08]
"You can remortgage your property...up to six months earlier than your expiry...If the rates improve, you can always ditch the application...and reapply."
—Anthony Emerson [10:08]
"The borrower will generally find [offset mortgages] quite attractive...it costs the lenders so much to administer it."
—Anthony Emerson [18:23]
"Family houses are going to do very well because, you know, the builders are building flats, they're not building houses."
—Anthony Emerson [26:08]
For more details or personalized advice, you can contact the show or reach out to Anthony Emerson at Trinity Financial.