I know we have only just welcomed in the New Year, but with so many economic commentators suggesting 2015 as a likely time for an interest rate rise, my top tip is for borrowers to look at their mortgages in 2014, as lenders will no doubt start to eek up their rates this year.
Behind the scenes, lenders will be factoring in an increase next year, and starting to price their mortgage products accordingly. I think the reality is that the record low mortgage deals currently available are not set to last.
A quick analysis of the likely increase in repayments shows that a rise in rates of just 0.5% on a typical mortgage worth the UK average of £150,000 would amount to an extra £62.50 per month which equates to a not insignificant £750 per year increase in mortgage bills.
So many borrowers finished their fixed rates ages ago and have been coasting along on their lender’s standard variable rate (SVR). The clue about SVRs is the V (variable) – it varies, so can go up at any time. If you are lucky enough to have an SVR which is linked to the Bank of England base rate, any increase in your SVR will be exactly the same as any base rate increases. Most borrowers, however are on an SVR which is set by the lender, so can go up (and down) as the lender chooses and without any warning.
Borrowers, should therefore look at their options now, while fixed are still incredibly low. Existing borrowers with 40% equity in their property can secure a 2 year fixed rate at 1.74% and for those with only 25% the lowest rate is 1.99%. Personally, I think it’s time to nail down a decent 5 year fixed rate, and today’s best deal is a gobsmacking 2.95%.
Of course not everyone will fit to the criteria, but there is definitely something for everyone who acts now.
It’s crucial that you talk to an Independent Mortgage Consultant, who can find the best deal to suit your circumstances and pocket. Different lenders have different rules on just about everything, so some expert guidance is essential.
For more information speak to a Mortgage Adviser on 01628 807477 or contact us.
Recent posts
Delayed Start Mortgage from Skipton
Yesterday
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
Gardening Tips for Beginners
6 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
The Family-Backed Mortgage from NatWest
9 days ago
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
The Impact of Klarna on Mortgage Applications
10 days ago
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
Buy to Let mortgages: what's happening?
15 days ago
We look at how to get the best Buy to Let mortgage rate, what's in store going forward, and options as a landlord with increasing costs.
UK mortgage rates following Trump’s Tariffs
24 days ago
Throughout this past week, lenders have continued to reduce their mortgage rates giving borrowers in the UK some welcome news following the change in global tariffs under US President, Donald Trump.
Effective ways to relieve stress
24 days ago
Did you know that buying a house, or relocating is in the top 10 most stressful life events?
Stress of course is an unavoidable part of life and there are many reasons why people experience stress, not just buying a house!
There are lots of effective ways to manage and reduce stress, check out our tips to help you.
With the stamp duty relief ending in England and Northern Ireland, we have listed the top 10 cheapest areas for first-time buyers as published by Rightmove.
More information
Trusted by
