There’s been much hustle and bustle in the financial world recently – you may have heard about The Bank of England raising the base rate from 0.5% to 0.75% earlier this month – only the second rise the UK has seen in over a decade.
It doesn’t look like that much of a difference, but it can have an impact on your mortgage rate and your monthly payments. That’s why if you’re on a standard variable rate (SVR) or a tracker rate, it’s time to move to a fixed rate mortgage.
So, why should you change to a fixed rate mortgage?
With the recent rate rise, if you are on a variable or tracker mortgage rate, your monthly cost for your mortgage will have risen. It’s quite likely that you’ve already received a notification from your lender saying as much. A fixed-rate mortgage will cement your monthly payments for the agreed duration regardless of any further (and likely) increases.
So, we repeat. Whatever you pay each month will stay the same until the deal ends. Full stop.
For example, if you took out a mortgage fixed at 0.5% for 5 years at the start of this year, the recent rate rise of 0.75% wouldn’t affect your payments – you would carry on paying the same amount until 2023.
If your fixed rate term came to an end earlier this year – then your mortgage will have increased as you will be charged your lender’s Standard Variable Rate which fluctuates with the interest rate dictated by the Bank of England.
Choosing the right mortgage with the appropriate interest rate can help save you money! And we’re here to help you do just that.
To find out more about mortgage rates or if you’d like to speak to an independent adviser about your current mortgage rate, contact us today on 01639 26222 or send us an email via this link.
**Please be aware that your property may be repossessed if you fail to keep up with repayments on your mortgage.