I'm a software developer who recently moved from Eastern Europe to the UK and I'm considering applying for a mortgage. I have a good deposit to offer (30%), which should ensure that I will get the mortgage with low interest rates.

Because a mortgage is over a long period of time, I'm worried that the political instability and uncertainty brought by Brexit will negatively affect my mortgage and way of life. For instance, interest rates could go up, the pound (GBP) may go down and the cost of living may increase drastically.

Given the current situation the UK is in, would it be wise to apply for a mortgage?

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    I sort of feel this question may be too opinion-based, but as it hasn't attracted any close votes yet, I've tried to provide an objective answer. – GS - Apologise to Monica Jul 30 '17 at 15:55
  • @GaneshSittampalam While the question as asked is quite broad and perhaps asked in a way not-quite on topic for this site, I personally think your answer does a good job at redirecting this back to an answerable question. – Grade 'Eh' Bacon Jul 31 '17 at 13:14

Only you can decide whether it's wise or not given your own personal circumstances.

Brexit is certainly a big risk, and noone can really know what will happen yet. The specific worries you mention are certainly valid. Additionally you might find it hard to keep your job or get a new one if the economy turns bad, and in an extreme "no deal" scenario you might find yourself forced to leave - though I think that's very unlikely. House prices could also collapse leaving you in "negative equity".

If you're planning on staying in the same location in the UK for a long time, a house tends to be a worthwhile investment, particularly as you always need somewhere to live, so owning it is a "hedge" against prices rising. Even if prices do fall, you do still have somewhere to live. If you're planning on going back to your home country at some point, that reduces the value of owning a house.

If you want to reduce your risk, consider getting a mortgage with a long-term fixed rate. There are some available for 10 years, which I'd hope would be enough to get us over most of the Brexit volatility.

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Nobody can predict the affects of Brexit but it is wise to consider them.

We saw the pound weaken after the vote to leave and it is possible the pound will weaken further after Brexit and this devaluation could be quite dramatic.

If that happens it is likely to increase inflation, UK inflation has gone from under 1% around the time of the referendum to 3% today and it could well go higher.


If inflation continues to increase, the Bank of England is likely to put up interest rates, as it has historically done this to hedge against inflation. We have been living in a world of artificially low interest rates since the global crash of 2008 as the BoE has tried to stimulate recovery with lower rates. The rates cannot continue at this level if inflation starts to rise.


That in turn will put up mortgage rates. So for example if you have a £100k mortgage at 3.92% (currently this is a reasonable rate to have) your repayments will be £523 a month. If your mortgage rate goes up to say 7% then your repayments are £707 a month, if it goes up to 10% then it's £909 a month and so on.

There is a mortgage calculator you can use to try playing with different amounts here:


My advice would therefore be try to get as small a mortgage as you can and make sure you can afford it quite comfortably, in case rates go up and you need to find a few hundred pounds a month extra.

There are other risks from Brexit as well, house prices could fall as people decide not to buy properties due to excessive interest rates!

Overall nobody knows what will happen but it is good to be planning ahead for all eventualities.

** I am not a financial advisor, this advice is given in good faith but with no financial qualification.

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