Many homeowners have been benefiting from historically low Bank of England Base rates over the last decade.
These low interest rates have helped many to either buy homes or continue to live in their homes during several years of uncertainty and ‘budget-tightening’.
In addition to low interest rates, many mortgage lenders have been offering borrowers discounted interest rates during the first few years. The argument is that new homeowners are cash poor and an initial low rate helps them to pay for all the costs associated with buying a new home. Unfortunately, these initial rates will, eventually, come to an end and when they do the cost of your mortgage may change - sometimes dramatically.
The same is true of capped or fixed rate deals where interest rates might have been set at a certain figure, which will revert to a known variable (such as the Bank of England Base Rate or the lender’s Standard Variable Rate) at the end of the fixed rate period.
All of the above mentioned indices are largely linked, in reality, with most lenders setting their SVR (Standard Variable Rate) a little higher than the Base Rate of the Bank of England. However, the SVR for each lender may be more or less competitive and as such it’s worth shopping around whenever your rate reverts to the lender’s SVR.
Tracker mortgages that are linked to indices like the current Bank of England Base Rate or LIBOR tend to be more predictable as both indices are published regularly and are set, either by the Monetary Policy Committee of the Bank of England or by the major banks in the case of LIBOR.
Many lenders will notify you when your fixed term is due to end, but some may not. If you arranged your mortgage through a Mortgage Adviser, it is likely that they will be in touch before your fixed rate finishes so that they can search the market for a new mortgage product for you.
If your property has increased in value since you took your mortgage you are likely to obtain a more favourable rate.
If you have more disposable income than before, you may qualify for a deal that you could not previously secure.
We recommend that you always take professional independent advice from a mortgage broker who can look into these factors for you when considering a change in your mortgage provider.
Contact us today on 01628 507477 to speak to an advisor.
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.
5 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.
8 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.
‘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?
14 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.
23 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.
23 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.