Concerned about your mortgage payments after the recent Interest rate rise read on.
There has literally been a whole generation that has not experienced an Interest rate rise until this month. The Governor of the Bank of England has also hinted at two further rises on the horizon. So what can be done to reduce your worry?
Here are some my Top Tip to deal with the recent Interest rate rise
- Look at your current mortgage terms.
If you’re on a variable rather than fixed rate the urgency is greater.
Your Bank or Building Society should have written to you in the last few weeks to advise what your new payment will be. This letter will help you see if you can better the terms by remortgaging.
- Work out what you can afford. To remortgage you are likely to be limited to 4 to 5 times your joint earned income.
- Build up you credit rating before you switch mortgages.
If you have a poor score on key credit agencies such as Equifax and Experian consider taking out a credit card and clearing it monthly by direct debit to demonstrate you can service commitments. And, don’t despair there are Lenders that will look at indifferent credit profiles, and the rates may still be better than your current one and can be fixed.
- Pay down your mortgage.
Look at the terms of the mortgage. There is normally a section entitled early repayment charges. A large number of lenders allow you to pay off up to 10% of the debt in a year without charging you even if you are still in a fixed period.
- Fixed rates.
Although no one can predict future interest rate rates but the general feeling is this rate rise is the first of many. Fixing your rate can allow you to budget and plan for the future. Fixed rates are commonly taken over 2, 3 and 5 years but there are also 10 year options too.
- Ask for help.
If mortgages are bewildering to you why not ask a family member or close friend to help, or consider using the services of a professional Mortgage Broker such as Niche Advice.
Niche Advice offers suitable mortgage advice to customers looking to fix their mortgage. They can access the whole of the market to find a solution for your circumstances. To find out more complete the Contact Form on this website or call T: 020 7993 2044.
Author: Payam Azadi
Payam Azadi is a partner at Niche Advice who are whole of the market Independent Finance Brokers In London. His role is very much focused on Property financing both on residential and commercial lines.