Homeowners Challenge as Mortgage Deals End

As the curtain falls on fixed rate mortgage deals for many UK homeowners, they find themselves at the crossroads of looming financial adjustments driven by inflation, imminent mortgage repayment hikes, and the challenges of the larger economic landscape.

However, rather than being mere spectators to these shifts, homeowners are actively diving into a world of side hustles, financial rejigging, and the hunt for new mortgage deals to secure their financial footing.

We take a look at the many strategies employed by homeowners, their proactive approach, and the various resources assisting them in this journey.

Key Points

  • A significant portion of UK homeowners are proactively seeking additional work as their fixed mortgage deals conclude.
  • Stubborn inflation and surging costs in the UK are pressuring homeowners as rising mortgage rates loom.
  • Approximately 2.4 million homeowners will face expiring mortgage deals between 2023 and 2024, driving the search for alternative income and new mortgage deals.
  • A diverse range of side hustles, both digital and traditional, are being adopted to combat the potential financial challenges.
  • Scouting for better mortgage deals can serve as a proactive strategy to potentially alleviate some financial strain.

The Financial Landscape and Mortgage Deals

The UK is currently grappling with resilient inflation and surging costs.

Though increased mortgage rates haven’t affected every household, it’s merely a matter of time before they amplify the financial burden.

A staggering 800,000 mortgage deals will conclude by the end of 2023, and a further 1.6 million in 2024.

With borrowing rates close to peak levels, renewing these mortgages could result in an average surge of £220 in monthly expenses for many families.

Exploring the World of Side Hustles

The growing popularity of side hustles isn’t just about taking up extra shifts. The digital era offers a plethora of opportunities:

  1. Digital Ventures: Many are turning to blogging, affiliate marketing, or even starting YouTube channels. With adequate effort, these platforms can yield significant revenue.
  2. Freelancing: Websites like Upwork or Fiverr offer platforms for skills ranging from graphic design to content writing, allowing individuals to earn from their expertise.
  3. Online Tutoring: Those with a knack for teaching can offer lessons in subjects they’re proficient in, reaching students globally.
  4. Crafts and Handmade Goods: Platforms like Etsy give artisans a chance to sell their crafts to a wider audience.
  5. Property Rentals: Using platforms like Airbnb, homeowners can make use of spare rooms or properties, turning them into a source of income.

In addition to these, there’s Indeed Flex, which caters to those looking for flexible shifts in more traditional job roles.

By capitalising on platforms like Indeed Flex and other side hustles, homeowners can find various job opportunities, allowing them to supplement their income and ease the forthcoming financial pressures.

Proactive Homeowners and Side Hustles

Instead of adopting a wait-and-see approach, nearly 30% of homeowners with expiring mortgage deals within the year are already gearing up.

They’re not just sticking to one source of income; they’re diversifying their income streams, exploring everything from digital ventures to traditional jobs, showcasing their forward-thinking nature.

A noteworthy insight is the age demographic of these proactive homeowners.

Three out of ten engaging in extra work fall within the 25-34 age bracket, a group often newer to the housing market and thus facing potentially higher repayments.

Contrastingly, only about 11% of those aged between 55 and 64 are seeking supplementary employment.

Establish a Budget

Establish a budget

Beyond seeking additional income, over half (54%) of UK mortgage-holders are making financial adjustments.

They’re reducing expenses on non-essentials, like dining out and vacations. Additionally, 34% claim a straightforward strategy – spend less and save more.

As Novo Constare, CEO and Co-founder of Indeed Flex, said: “Facing financial realities head-on can be challenging, but ignoring them is likely to prove costly in the long run.”

To help manage their financial realities, a key requirement for homeowners is to establish a clear and cohesive budget.

Crafting a budget involves listing all sources of income and detailing monthly expenses, both essential and discretionary.

By visualising where the money flows each month, homeowners can identify areas of excess and potential savings.

Moreover, a well-defined budget serves as a roadmap, offering clarity in financial decision-making.

By adhering to a budget, homeowners can not only prepare for potential hikes in repayments but also accumulate savings, ensuring they’re equipped to face any unforeseen financial challenges or take advantage of new mortgage opportunities when they arise.

Scouting for New Mortgage Deals

As homeowners try and manage a mortgage, while side hustles and financial adjustments are effective coping mechanisms, another proactive measure homeowners can consider is exploring new mortgage deals.

Here’s a guide to sourcing potentially more affordable mortgage options:

  1. Research Online
    • Many comparison websites offer insights into the best mortgage rates available, tailored to different circumstances and requirements.
  2. Engage a Mortgage Broker
    • A mortgage broker can help homeowners navigate the complex world of mortgages, finding deals that might not be readily visible to the public.
    • You may need specialist guidance depending on your specific needs, perhaps for example if you own a specialist or niche type property or maybe have credit history issues.
  3. Stay Updated with Current Lenders
    • Often, lenders notify their current customers about new mortgage deals before advertising them widely.
    • Keeping a line of communication open with one’s existing bank or lender can be beneficial.
  4. Look Beyond Mainstream Banks
    • Sometimes, smaller building societies or niche lenders offer competitive rates, especially for specific types of buyers or properties.
  5. Review the Terms
    • Before jumping into a new mortgage deal, it’s crucial to understand all the terms.
    • Factors such as the flexibility to overpay, the ability to take a break from payments, and the length of the fixed rate can impact the overall benefits of a deal.

In an ever-changing financial environment, periodically reviewing and renewing your mortgage can save significant sums in the long run.

Not only does this shield homeowners from potentially volatile market shifts, but it also offers peace of mind knowing they’re getting the best deal possible.

To Conclude

As the end of fixed-rate mortgage deals draws closer for many, UK homeowners are proving their adaptability and resilience.

Whether it’s through diversifying their income streams with side hustles, tightening budgets, or actively seeking better mortgage deals, they’re taking steps to ensure a stable financial future.

Platforms like Indeed Flex and resources on new mortgage deals play a pivotal role in supporting homeowners through these uncertain times.

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