Mortgage deals: how to lock in a good rate

Now is the time to grab a low fixed-rate mortgage – but it might not be as easy as you think

BRISTOL, ENGLAND - OCTOBER 08:A view of housing on October 8, 2014 in Bristol, England. On the first anniversary of the introduction of second phase of the Help to Buy scheme, which provides
(Image credit: 2014 Getty Images)

It has been a mixed year for those of us on, or hoping to get on, the housing ladder. House prices have been booming and mortgage rates have remained at rock bottom. However, interest rates are expected to start rising next year, with the first hike expected no later than summer 2015. As a result, mortgage rates are already rising as lenders act ahead of a Bank of England rate move.

So it seems to make sense to act now to grab a low fixed rate. Trouble is, there is a fly in the ointment. The Mortgage Market Review (MMR) has made getting a mortgage harder than ever. Why? The MMR – put in place this year by regulators in an attempt to avoid a repeat of the careless lending of the pre-crash days – has led to lenders moving away from the old system of working out how much to lend based solely on your income. Forget the days where you could easily get hold of four, five or even six times your income. Now the amount you can borrow is based on how much you can afford to repay.

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