The owner of the real estate portal, real estate skipper, has quietly launched what may be Bermuda’s only mortgage brokerage and is currently offering a promotional offer of a 5.25% all-inclusive mortgage, fixed for five years.
The man behind the offer is former banker, Peter Goodall, who appointed the middleman, Financial Morston. He said he opened the business last year for several reasons.
“We believe we have an incredibly powerful platform in propertyskipper to both promote mortgage rates and bring more clarity to the mortgage market,” he said.
“We work with financial institutions to promote specific offers or products such as the current promotion of a 5.25% mortgage, fixed for five years.
“It would be part of a 25 to 30 year mortgage and after the first five years it would switch to the prevailing variable rate, depending on the interest rate situation five years from now.
“At the end of the five-year mortgage, the client is free to remortgage or make lump sum payments without penalty.
“This is a fantastic product in the current environment where we are likely to see interest rate increases as the global economy recovers from the pandemic.”
Although Goodall said it might be reassuring for first-time buyers, he said the product has won over a wide audience.
“Many of our clients recognize that now is the time to secure their mortgage rate. We have heard from the Fed, the ECB and the Bank of England about the resulting inflationary pressures and we will likely see a period of rising interest rates as attempts are made to maintain this transitory rather than permanent inflation.
“By securing your mortgage for five years, you ensure that whatever happens to interest rates over the next five years, your monthly payments will not change. This would reassure many buyers or homeowners looking to remortgage.
“We have received inquiries from first-time buyers, clients looking to re-mortgage or extend their property. as well as clients looking to free up equity in their property to purchase other assets. »
Morston Financial currently only operates in Bermuda, but the company also offers UK ‘expatriate’ mortgages to Bermuda residents.
The company has seen substantial interest from Bermuda residents wanting to buy buy-to-let investment property in the UK, buying second homes in the UK, as well as Bermudians wanting to buy property with their children who study or work in the UK.
Goodall started propertyskipper in Bermuda in 2013 and has been growing local traffic every year since. He launched it in Guernsey in 2016, BVI in 2018 and Jersey in 2019.
He said: ‘We publish property listings from estate agents, making it easy for hunters to find all of the islands properties for sale or rent in one place.
“In Bermuda, we are the most visited real estate website with over 70,000 visits per month.”
Goodall’s banking experience includes working for ABN Amro in London, and later HSBC in Bermuda.
“I’ve always wanted to add a mortgage element to propertyskipper,” he said. “At the end of the day, it makes sense that house hunters are looking for property and mortgages in the same place. After all, they go together.
“Over the next few months we will fully integrate our mortgage platform with propertyskipper, allowing users to see live rate examples, monthly mortgage costs for properties they are viewing, and loan and application capabilities. quick mortgage.”
He said: “We work with lenders primarily to facilitate specific products. At any given time, the difference in variable mortgage rates in Bermuda between different lenders for an individual may not be very large.
“But when a lender has a specific product like 5.25%, fixed for five years, that’s a real differentiator and has, unsurprisingly, attracted a lot of attention.
“We have had a significant number of inquiries about this product. We hope to launch other new products in the coming weeks.
Customers have a single point of contact through their initial application, and there are examples of same-day mortgage offers. Morston seeks to make the process quick and efficient.
Goodall said: ‘We don’t charge customers for our service, the financial institution pays us at the end of your mortgage – so it’s in our interest to provide you with the best possible service.
“In addition, we offer transparent mortgage products to the market, such as the 5.25% five-year fixed product.
“There are examples where lenders don’t promote a mortgage offer themselves, but use a third-party broker like us to promote a certain product. Our recent price examples are always available on our website.
“I think Bermuda is a very different market from the UK. Banks are often fortunate to have loyal customers, that is, people who have done business with the same institution all their lives.
“Homebuyers don’t always consider considering mortgage options other than those offered by their own bank. An active broker promoting rates and offers will hopefully entice house hunters to research what might be available on the island.
Goodall said mortgage rates in Bermuda and the UK were quite different and there were a number of reasons for this. Unlike Bermuda, there is a volume of lenders in the UK, not just established banks.
He said: “There are building societies, private banks, new challenger banks, as well as specialist lenders. In the UK there is also a large and liquid secondary mortgage market for lenders to sell their loan portfolios.
“There are new fintech lenders in the UK funded by large institutions to create mortgages in specific segments of the market – the UK property market is significantly more liquid than here in Bermuda and lending has attracted a lot of capital, which in turn puts downward pressure on prices.
When it comes to the cost of a home in Bermuda, he said he’s spotted trends through propertyskipper.
“Like any desirable location,” he said, “there are big properties with big price tags, but that’s the same as other islands – we have properties of over 10 million properties announced in Guernsey and properties over $20 million announced in BVI and Jersey.
“Bermuda has also not seen the same property price inflation as some other markets recently – for example, in the year to September 2021, Guernsey has seen property prices climb 19% per year.
“Take London too – according to estate agent Foxtons the average price of a three-bedroom property in central London is now £1.7m or around $2.3m – in feet squares, I imagine you’ll get more properties here. It is also difficult to compare markets where salaries, taxes, construction costs and liquidity are different and, above all, the rules for home ownership are very different.
There are growing suggestions that interest rate moves could occur within weeks, as early as March. How does Goodall see this affecting the market?
“Some analysts think there could be four interest rate hikes by the Fed this year. this, as long as it is still available.
“As intermediaries we will continue to work with lenders to provide market competitive products, but I agree we will likely see mortgage costs increase.
“How does this affect mortgage applicants? Most analysts agree that while there may be a number of interest rate hikes this year, they are likely to be steady quarter-point hikes rather than big increases.
“Mortgage applicants should be aware, particularly on variable rates, that their mortgage costs are likely to increase and ensure they are comfortable with both current monthly repayments and the levels reimbursement probably increased later.”
Peter Goodall: property skipper and Morston Financial (Photograph provided)