On 2nd November, The Bank of England has voted to raise the base rate to 0.5 %, the first increase in more than ten years.
The Bank’s monetary policy committee voted seven to two to raise the rate to help tackle rising inflation and on the back of better than expected economic statistics in the country’s general economy.
Apparently a fifth of people with mortgages have never experienced a interest rate increase, but about half of those took out their mortgages after the Financial Conduct Authority made lenders introduce additional affordability stress tests in 2014.
Those stress tests require mortgages to be able to withstand an increase in mortgage rates of around 7 %. I am confident that those households will be fine!
Apparently around 60% of mortgages are on fixed rates, (it was 86% last year at Mortgage Required), and when these fixed rates finish, rest assured, the fixed rates on offer will be very competitive – possibly even comparable than current fixed rates.
Those borrowers not currently enjoying fixed rate mortgage or tracker mortgages will be on their lender’s Standard Variable rate (SVR). These rates are set by the individual mortgage lenders rather than the Bank of England, so lenders have a free reign on any increases.
If you are currently on your lenders SVR, it’s time to take some advice and switch rates – you are now at your lender’s mercy!
To be honest, the rate increases hardly made the front pages. Lenders had foreseen the rise and already adjusted their mortgage products a couple of weeks before. The increase on a £200,000 mortgage is around £22 per month, which isn’t exactly breaking news!
Contact us do discuss your mortgage on 01628 507477.
Recent posts
Decorating Tips for Selling Your Property
8 days ago
Selling up? It’s important to make your house as appealing as possible to potential buyers. Good decorating can help with first impressions, and increase the perceived value of your property.
20 Budget-Friendly Activities
27 days ago
With the cost of living affecting so many of us, we have made a list of budget-friendly activities and ideas for you.
Moving and Packing Tips for a Stress-Free Move
21 Jul 2023
Moving soon? It's never too early to get organised! Be prepared and avoid unwanted stress by checking out our list of tips to get you ready for moving day.
What is the UK Inflation Rate?
27 Jun 2023
Inflation simply put, is the increase in the price of something over time. The Office for National Statistics (ONS) tracks the prices of hundreds of everyday items and these items are updated to reflect shopping trends.
Debt Consolidation into a Mortgage
20 Jun 2023
We are often asked if it's good advice to consolidate “unsecured” debt (credit cards and loans etc) into your mortgage, the answer is, sometimes.
Parking Rules Explained
16 Jun 2023
When you’re looking to buy a home, and you own a car, you ideally want to know the rules on parking in the area. Parking rules can be confusing, even for the most experienced of drivers! This is why we have written this blog to help you.
Sources of Deposit to Buy a Property
6 Jun 2023
There are several potential sources you can consider when it comes to getting together a deposit to buy a property. Providing proof of the source of your deposit is a key requirement in the application process and will need to be given to both the lender and the solicitor.
What is a Mortgage Prisoner?
26 May 2023
Mortgage Prisoners are people who are unable to switch mortgages to a better deal, despite being up-to-date with their mortgage payments.
More information
Trusted by
