Interest rates will go up so what now?
Well we’ve certainly had it good with the Stamp Duty holiday and incredibly low interest rates throughout the summer. However, as the leaves start to drop the rates are starting slowing to go in the opposite direction. I guess it was to be expected with inflation exceeding the Bank of England’s target in recent months.
At the time of writing only Santander (source Twenty7tec) have a 5 year fixed under 1 per cert when most leading banks and building societies were in the same pool a week ago. The majority of them now set between 1.20 to 1.25 per cent. 0.25 per cent extra on a £200,000 this is about £688 a year increase so £3,440 over a 5 year fixed period. And, with the flight upwards if you need to re-fix in the next 6 months you should act now and lock-in.
The other pendulum that swings to our disadvantage is the Mortgage Lender’s affordability calculations which are linked to rates – the net result is less borrowing potential. And, we have seen a handful lenders reaching to make adjustments in the last week the most notable being Halifax. Expect others to follow.
If you’re worried about the looming interest rate rise and want to work out a strategy for your mortgage then do please get in touch and we can talk to you about how you may be able to be eligible for longer term fixed rate mortgages.