How does one lock in a rate?

smipsy

I have been thinking about buying a house for some time now, and I think I'm finally ready and will probably want to buy in the next 6 months. I am however aware that rates are going up, so earlier the better. But how do I actually lock in a rate? I was looking to buy earlier in the year, but it wasn't the right time for me, so the only thing I did at the time was a mortgage in principle, but nothing further. However, I have noticed many of the properties I was previously interested coming back at a lower price, with other reductions being also more common, so it seems to me that it's (if only temporary) currently easier to buy. I am not interested in waiting it out, and trying to catch a falling knife in terms of house prices, if they will even go down that much. I am just happy that there are currently a lot more offers available, which will mean a decent enough deal for me, hence deciding to push for a house purchase now!

Do I only get rates I can lock once I have an offer accepted and then I actually instruct the bank to start the whole process? Obviously I would like to lock in before any new increases, but I might be too late for that, hence asking here!

My finances, briefly:

£90k deposit
Safe employment (cannot be made redundant)
£31k per year basic salary without OT or allowances. For the next 12 months however I am temporarily promoted so I will be on £45k until 01.10.2023, which will help to absorb any maintenance costs, improvement costs, unexpected costs, etc. I do understand that banks will only use my £31k basic for the mortgage.
I have no debts.

The above is disregarding a small part time income from my partner (sole trader paying himself the 7k a year which is the maximum without attracting any NI, etc). I also understand that the banks will more or less ignore my partner's income as it's only 7k, which is fine.

We are currently paying £700 in rent every month, which is likely to be raised to £800 or higher in the next 6 months. My mortgage would be anywhere from £400 to £500, so it seems like a no-brainer choice.

I am only looking for properties in the range of £160k to £200k, so I will always have the best LTV options for the lowest rates, which according to MSE is currently around 2.05%. I even saw some "lifetime" mortgage rates between 2.5% and 2.8%, which was really tempting, as I can overpay to the maximum allowed amounts easily.

So yeah, I'd like to get out with the least amount of interest, and of course, locking in a rate would help a long way! So any advice about what to do, how to do and when to do, would be greatly appreciated!

Many thanks, and have a nice week y'all!

secla

You will only lock in a rate once you have made a full application. So you will have to have an offer accepted.
when you get your mortgage offer accepted it will generally be for 6 months, Some will give extensions if it go`s over this amount and some will let you transfer to another property if purchase falls through. If the mortgage offer runs out before completing you will have to re-apply at whatever the new rates are at that time.

with a low LTV and modest borrowing your interest rates shouldnt be to bad regardless

Soot2006

Find the house, get an offer accepted and then apply for the mortgage. The mortgage offer then be valid for a certain amount of time, so that's essentially "locked in", unless everything falls apart in which case you get to start again. If you are risk averse and unlikely to move again soon, go for the longest fix you can so then you know what your mortgage outgoings will be for many years.

You're in a good position so I'd just start looking at houses and then start the process. You shouldn't be hit by any horrific rates just yet.