Worried about another potential interest rate rise?

Helping you to prepare for a possible increase in interest rates

Currently, there is discussion in the media about a likely rise in interest rates and how this could affect those who have a mortgage on their property. 

In this article, we talk about what homeowners can do to minimise the effect of a potential increase and how talking to a mortgage broker could help.

Many households need to brace themselves for a rise in mortgage costs

By the end of 2023, 1.4 million households will see their fixed-rate deals coming to an end with deals automatically being moved over to the lender’s standard variable rate option. The result could be that home owners will see their mortgage repayments increase by an average of £250 per month*.

Why are mortgages so expensive right now?

Back in 2021, the official bank rate was 0.1%* with mortgage rates slightly higher than this. As the bank rate has soared to the current 4%* so has mortgage rates, with households paying more now than they will have done for many years. 

What you could be doing now

It’s impossible to predict the future and to say for certain whether interest rates will rise or not and by how much. However, there are things you could be doing now to help prepare for this possibility. 

You can find the details of when your existing deal ends on your mortgage contract. This will let you know whether you are in a position to consider fixing a rate on a new mortgage deal early.

‘With the BOE (Bank of England) base rate at 4.5% and the market pricing in further increases you should consider fixing your mortgage if you are worried about how interest rates might go and whether you can keep up your mortgage repayments.’ (1)

You could try and lock in a new mortgage deal before your current fixed deal ends. This is possible up to six months before and would protect you against any possible further rate rises. In the meantime, you would stay on your current deal until the contract expires.

Setting some funds aside each month would give you a safety net if rates were to go up and your mortgage repayments increased as a result. 

Mortgage brokers are able to research the market to find deals that are suitable for your specific circumstances. They often have access to a range of products from High Street lenders as well as specialist products that are not available direct, providing a greater chance of finding a deal that’s right for you. 

Read about how important it is to seek mortgage advice from a broker HERE

With years of experience as a mortgage broker and a history of positive reviews on Trustpilot,  you can be safe in the knowledge that our qualified and friendly advisors will do all they can to help secure the best deal for your situation and to keep your costs down.

More reasons to choose Mallory Financial 

  • Access to specialist lenders and competitive deals not found on the high street

  • Fully qualified to help with your borrowing needs

  • Act in line with the Financial Conduct Authority

  • Assist in the details of your mortgage application 

  • We have your best interests at heart

Why are interest rates expected to rise?

Inflation figures fell to 8.7% in the year to April. This was lower than expected and has fuelled speculation that the Bank of England might raise rates as a way of controlling this. The idea is that higher rates discourage consumers from spending, ultimately driving prices down.

“On the MPC* we remain committed to bringing it (inflation) back to our 2 per cent target, and that is what we will do,” said Jonathan Haskel. “Our tool for doing this is interest rates.” (2)

We are here to support you

We understand that uncertainty around an interest rate rise could provoke worry due to the resulting increase in monthly mortgage repayments – especially if you’re on a variable rate, a tracker mortgage or if you’re due to come out of your mortgage deal soon.

Our advisors are here to provide help and advice whenever you need us, either on the phone, by email or by using the contact form below. 

Your home / property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but will be agreed with you before proceeding.

Sources*

(1) https://moneytothemasses.com/owning-a-home/interest-rate-forecasts/latest-interest-rate-predictions-when-will-rates-rise
(2) https://moneyweek.com/economy/uk-economy/605427/when-will-interest-rates-go-up 

https://www.standard.co.uk/news/uk/why-interest-rates-rising-bank-of-england-announcement-how-high-inflation-recession-b998449.html

*MPC Monetary Policy Commission

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