It feels as though we’ve been publishing a few of these interest rate rise articles of late. And that’s because we have. Six, in fact.

Yesterday, the Bank of England (BoE) hiked up the base rate a significant 0.50% – the biggest increase since 1995 and the sixth since December last year. Many existing mortgage holders and those looking to apply for a first-time buyer mortgage will now be wondering what this means for their them. If that’s you, read on.

BIG inflation, BIG interest rate rises

The announcement of a 0.50% rise, which now takes the BoE’s base rate to 1.75%, was also coupled with predictions of inflation hitting 13 – 15% and talk of a looming recession.

Even as Guildford mortgage brokers, it would be disingenuous of us not to point out that getting a mortgage in the UK today involves more hurdles than it did in Spring. And those embarking on homeownership for the first time may need to prepare to increase the size of their deposit and pay higher monthly mortgage payments than initially expected.

But it’s also important to remember that the last 15 years have seen unprecedented low interest rates. Prior to the financial crash of 2008, average mortgage rates were around the 6% mark. Some mortgage brokers in Guildford will never even have worked in this kind of climate, whereby rates are rapidly increasing and a mortgage deal can disappear between the hours of 9am and 5pm in a single day.

The point is that all is not lost, mortgage rates are still at a relatively reasonable level and getting a mortgage isn’t unachievable. 

Two perspectives

Our advice broadly covers two camps: existing homeowners and those about to apply for a mortgage.

For existing homeowners who prefer certainty, who don’t want their monthly mortgage payments to increase and who are still on a variable mortgage – be it a tracker or their standard variable rate mortgage – now might be the time to switch to a fixed rate mortgage.

As previously mentioned, deals that appear to be available at the beginning of the day can easily disappear by the end of it. So, if you don’t have a day to spare – or access to the whole of the mortgage market – then we recommend that you ask a mortgage broker to search the market and find the best mortgage deals on your behalf. As an award-winning Surrey mortgage broker, we’re currently getting our clients the best mortgage deal available in any given day, so don’t be tempted to go it alone. Seek professional mortgage advice. From our perspective, the benefits of using a mortgage broker in this climate couldn’t be clearer.

If you’re a first-time buyer that’s looking to apply for a first-time buyer mortgage, then you’re probably going to find the 0.5% base rate jump disheartening. However, it’s our view that rates are going to continue to increase – certainly whilst inflation is so high – so any deal that you get today is likely to be better than any deal you’ll find tomorrow.

On that basis, we recommend that you move just as quickly in order to protect your deposit from being eroded – in real terms – by inflation and get on the ladder as soon as possible. We’re first-time buyer mortgage experts, and whilst we’re not promising access to the kind of deals that were available only last month, we will be able to access the best first-time buyer mortgage deals currently on the market. 

Keep it in perspective

Whilst today’s market is undoubtedly turbulent, it’s been worse. Much worse. So, in order to keep moving forward and either get a foot on the property ladder or switch to a better mortgage rate, contact a mortgage broker today.

If you’re concerned about the interest rate rise and would like mortgage advice or help with getting a better mortgage deal, contact our team of Guildford mortgage advisers on 01483 238280 or e-mail