It certainly didn’t come as a surprise. After all – and as we’ve said many times before – when rates are the lowest that they can possibly be, there’s only one way they can go. Even so, interest rate rises are generally big news. And they also have a wider economic impact, too.
But of course, it’s not just interest rate rises that are set to increase the cost of living for the UK’s population. There’s inflation to contend with and now, following Ofgem’s decision to raise the price cap, energy price hikes are sadly predicted to send many into fuel poverty, too.
As a Guildford mortgage broker, there’s very little we can do about inflation. Similarly, there’s probably better people to turn to when it comes to managing energy bills. However, when it comes to answering the question how will interest rate rises affect my mortgage?, then we’re well-placed to help.
If you haven’t already, then it might be worth looking at applying for a fixed rate mortgage. Those currently on a tracker mortgage or the standard variable rate (SVR) mortgage will very soon notice an increase in monthly mortgage payments. The Daily Mail*, for instance, states that the average Briton will see their payments increase by £552 a year (or £46 per month), which is a considerable amount of money.
The cost of fixed rate mortgages has been incredibly low for some time now. In fact, we’ve repeatedly said that over the last two years, we’ve witnessed some of the best fixed rate mortgage deals in the UK that we’ve ever seen.
However, just as interest rates go up, so too will the cost of fixed rate mortgages. As to how much they will increase, we don’t yet know (although some lenders have already increased their rates). Furthermore, we don’t know when the next interest rate rise will be, either. If inflation continues to concern the Bank of England, then it’s likely that it won’t sit at 0.5% for long.
Our advice? If your mortgage deal is coming to an end, or if you’re currently sat on an SVR or tracker mortgage, then it could be time to get a fixed rate mortgage. We have access to some of the cheapest fixed rate mortgage deals in the UK, so get in touch before rates continue to increase.
Contact one of our Guildford mortgage advisers on 01483 238280 or email info@complete-mortgages.co.uk. We specialise in first time buyer mortgages, equity release mortgages and commercial mortgages.
*Source: Daily Mail
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