Three of the eight Bank of England official policy makers support the UK interest rate being raised. Although interest rates will still be held at 0.25% it implies that a higher rate may be put into place soon.
Why could this affect me?
If there is a rise in the base rate of interest it is likely that lenders will want to charge more and therefore the cost of borrowing would increase. This would not just affect those looking to borrow but also people who are currently paying back loans.
Many homeowners are on a standard variable rate or tracker mortgage and this could be affected by a rate rise, as the cost of borrowing would increase. A lack of preparation for a rise in your mortgage rate could cause you problems because even though the first rise may be small over time this could add a significant amount to your repayment, which you may not be able to afford.
What can I do about it?
Speak to a mortgage adviser! Rates and affordability vary massively from lender to lender and with so many products on the market it can be hard to find the one most suitable to your unique circumstances.
Our advisers are fully independent, so we can search the whole market for the mortgage or alternative finance that’s right for you, at the best possible interest rate. By contrast, banks and building societies can only offer a limited range of mortgages, and some mortgage advisers are also tied to preferred partners.
If you already have a mortgage we can assess it and research whether there are more suitable products for you. We can guide you through the process and reduce stress by liaising with estate agents and solicitors on your behalf, making sure you are kept up to date.
Kevin Dunn, Mortgages and Protection Adviser said that ‘With interest rates at an all time low, there has never been a better time to get on the housing ladder. Also, if you already own your own home, there has never been a better time to review your mortgage. Any money saved may give you a great opportunity to reduce the amount of years on your mortgage.’
What our clients say
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Your home may be repossessed if you do not keep up repayments on your mortgage.