Check your mortgage contract because the base rate should increase

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Homeowners Warned to Check Current Mortgage Offers Ahead of Expected Interest Rate Rise

Homeowners are being warned to check their current mortgage deals ahead of an expected interest rate hike on Thursday.

Experts predict that the Bank of England will announce a hike in the base rate of up to 0.75 percentage points, which could take it to 2.5%.

In December last year, the base rate was just 0.1%, but since then it has risen to help combat a rise in inflation, which now stands at 9.9 %.

Be prepared: Experts predict that the Bank of England will announce a base rate hike of up to 0.75 percentage points, which could take it up to 2.5%.

David Hollingworth, mortgage expert at brokerage L&C Mortgages, says: “Homeowners need to be prepared for the tough times ahead. If you’re currently on a fixed-rate deal that’s ending in the next few months, it might be a good idea to look for a new deal now that you can change once your old deal ends.

“Vendors often allow you to tune in to current offers up to six months in advance.” He adds that homeowners with competitive offers should consider overpaying now if they can afford it, as mortgages are likely to get more expensive in the future.

Most lenders allow borrowers to overpay by around 10% per year without incurring a penalty.

Among the best five-year deals on the market is a rate of 3.54% from HSBC. This is a 60% mortgage with an arrangement fee of £999.

Santander currently offers one of the most competitive two-year fixed rate deals at 3.79% for a loan-to-value ratio of 75%, and it also attracts an arrangement fee of £999.

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