How The Base Rate Rise Will Impact Mortgages | Expert Opinion

When purchasing a property, the vast majority of people require a mortgage. This type of secured loan enables people to afford properties that would otherwise be out of their budget and there are several different mortgage products available to consider. 

Over the years, until they have completely repaid their loan amount, homeowners often have lots of different mortgage deals and as one deal ends, they look for another with competitive terms. Whether you’re switching to another mortgage lender and remortgaging or sticking with your current mortgage lender and taking out a product transfer, getting a new mortgage deal is key to avoiding your lender’s Standard Variable Rate (SVR), which usually has a much higher interest rate. The mortgage market is continually changing too and getting a new mortgage deal could help to ensure you have the most competitive terms. 

Many homeowners don’t realise that you can start looking for a new mortgage deal before your current deal comes to an end. In fact, mortgage advisers usually recommend that you have a new deal in place ready for when your existing mortgage deal ends. Now is the perfect time to lock in a new mortgage deal and below we have explored why. 

How far in advance can you lock in a new mortgage deal?

Typically, new mortgage deals are valid for between three to six months after the offer was first made and therefore, you could lock in a new mortgage deal before your current deal ends. Securing a new mortgage with the same lender or a different lender in advance would enable you to move straight to this mortgage when your existing mortgage comes to an end, providing peace of mind that you won’t have to pay a lender's everchanging SVR. 

Different mortgage providers enable you to start the process of applying for a mortgage at different times and as mentioned above, this is usually between three and six months before the end of your current mortgage. However, this has changed recently. Lots of major mortgage lenders are now enabling homeowners to lock in a new mortgage deal further in advance.  

This change is in response to more homeowners looking to reserve competitive mortgage deals further in advance as interest rates continue to rise. More so than ever before, people are searching the mortgage market for deals with the lowest interest rates and when possible, they are locking in these deals before the Bank of England’s base rate rises again. 

The uncertain economy is of huge concern to homeowners whose mortgage deals are coming to an end in the next few months and many experts predict that the Bank of England’s base rate will continue to rise as we head into 2023. So, locking in a new mortgage deal now is one of the best ways to avoid the high-interest rates that the future has in store and you can rest assured knowing that the monthly repayments for your mortgage won’t become unaffordable. 

When should homeowners start looking for a new mortgage deal?

It is beneficial to start looking at what mortgage deals are available around six months before your current deal expires. This provides you with plenty of time to compare the offers provided by both your existing mortgage lender and other lenders, and you can ensure you have something suitable lined up before your deal is due to finish. 

You don’t necessarily have to start applying for mortgages six months before your current deal ends, but knowing what the latest mortgage offers are is very useful. Keeping an eye on the Bank of England’s base rate and mortgage providers’ interest rates will help you to decide when is the best time to lock into a new mortgage deal. 

If you’re not sure how to compare mortgage deals or where to look for the best mortgage products, it’s beneficial to reach out to a mortgage adviser. They can help you to conduct an in-depth mortgage market review, assessing all of the available options and they can even provide some expert advice regarding what might happen to interest rates in the future. Using a mortgage adviser can help to prevent you from locking in the wrong mortgage deal.  

Getting some advice from a mortgage expert 

Here at Mortgage Required, our team of mortgage advisors will be happy to help you review the latest mortgage offers and help you find the ideal solution for your circumstances. Since being established in 2001, we have been providing a whole of market mortgage service to our customers and we can advise on all aspects of the mortgage market. We can assure you that we stay up-to-date with the changing mortgage market and we can provide you with the comprehensive assistance you need when locking in a new mortgage deal. 

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be no fee for Mortgage Advice. There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, but we estimate it to be £399.

Mortgage Required Ltd, Finance House, 5 Bath Road, Maidenhead, SL6 4AQ is authorised and regulated by the Financial Conduct Authority reference 573718 at www.fca.org.uk.

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