Mortgages – What You Need To Do Now
Mortgages – Why to Take Action Now Ahead of Expected Base Rate Increase
After years of low interest rates, experts are predicting a rise in The Bank of England’s base rate this month and perhaps again later in the year, but what does that mean for you?
By Polly Kerr of Optimum Financial Solutions
In preparation for the increase, many of the best mortgage deals are starting to vanish and the two-year fixed rate is the highest it has been since September 2016, on average.
No one could have predicted the plummeting of the base rate that took place between December 2007 and April 2009. It dramatically dropped from 5.75% to 0.5% in 16 months and then stayed there for over 9 years before dropping it again to 0.25%. In November 2017, the base rate rose for the first time since July 2007, when the rate increased to its highest at 5.75%. Despite the rise in November only being a quarter of a percent, mortgage rates increased as lenders appeared to be taking no chances.
No one knows for sure whether the base rate will increase this year, perhaps more than once, maybe not, but with the best deals starting to come off the market for mortgages and borrowing, now would be a good time to weigh up your options and stay ahead of the game.
What you can be sure of is that if you are on any sort of variable rate, and another increase does happen, you will feel it in your mortgage payments. So, if like many, you work to a monthly budget, you’ll not want to be caught out by paying an extra lump each month for your mortgage repayments.
“With rates on the up it’s vital anyone coming to the end of a fixed or tracker introductory deal – or who is paying their lender’s potentially expensive standard variable rate – checks if they can save by re-mortgaging and locking in a cheap deal while they last. While rates are rising, they are still extremely cheap historically,” says Guy Anker, MoneySavingExpert.com managing editor.
Planning for increases to interest rates if you have one mortgage or more, should be an annual meeting with your financial advisor; the last thing any of us want is an entirely unexpected jump in our monthly mortgage repayments.