Mortgage Matters - What's going to happen to Mortgage Interest Rates?
Most talked about topic of the moment is interest rates and where they go next. Is it something to worry about ? Should I fix a new mortgage rate ? Can I fix a new mortgage rate ? Is it all media hype or a genuine threat to cheap money that makes many types of borrowing affordable ?
Most talked about topic of the moment is interest rates and where they go next. Is it something to worry about ? Should I fix a new mortgage rate ? Can I fix a new mortgage rate ? Is it all media hype or a genuine threat to cheap money that makes many types of borrowing affordable ?
To put things into context the Bank of England Base Rate was 5% in April 2008; within a year it was 0.5% as a result of the Global Financial Crisis. It took nearly a decade to increase to 0.75% and then as everyone had got used to it along came Covid - with the Bank of England cutting twice in March 2020 to 0.1%
Mortgage rates have followed - albeit with some difficult periods over the last 18 months when high Loan to Value mortgages were expensive or just not available at all.
Whether or not a Base Rate hike happens, mortgage lenders are already acting; the very cheapest rates at low Loan to Values are being withdrawn on a daily basis. The replacement mortgage products are higher - but not by a great deal - so far !
So what should I do ? Most mortgage borrowers have a fixed rate product with an end date, up to that date there will be an Early Repayment Charge (ERC) which may make switching to a new product uneconomical. However, when remortgaging most lenders will make an offer that's valid for up to 6 months, therefore if your current deal is ending within this period you may be able to grab a new deal now and wait for it to take effect when your current deal ends. It also gives you some time to change your mind - if rates fall - however unlikely, you can just walk away as long as the new product hasn't started.
All of this needs expert advice; timing, eligibility, and access to a comprehensive range of lenders and products. Contact us now for a free review.
If you'd like some advice on mortgages or if you are looking for a mortgage for your next property purchase please let us know HERE and one of the team from Stannard McMahon will be in touch.