As predicted, the Bank of England raised interest rate again this month, for the fourth time in as many meetings of the Monetary Policy Committee. Rates rose to 1 per cent from 0.75 per cent, up from a low of 0.1 per cent during the pandemic. With inflation at a 30-year high and set to hit 10 per cent by the autumn, this rate rise is highly unlikely to be the last. Those borrowers who had the foresight to take out a fixed-rate mortgage won’t see any change to their monthly payments. But those on variable-rate mortgages will see another uptick in their monthly payments. If you are in this position, and worried about the potential of future rate rises, it may be worth considering a fixed-rate mortgage. With the money markets factoring in this rate rise, lenders have already been increasing their cheapest mortgage rates but there are still some excellent deals available. Two- and five-year fixes are available from less than 2.5 per cent, depending on your loan-to-value, with longer fixes increasingly pegged at the same level as shorter deals. While a longer fix will give you security from rising interest rates for longer, it is important not to fix for longer than you are absolutely certain about, or you may have to pay a hefty early repayment charge to get out of the mortgage early. Anyone looking for a mortgage, whether to purchase a property or to remortgage. May wish to think about securing one sooner rather than later. Most rates can be booked up to six months before you actually need them. So with pricing only likely to increase, booking a rate now will give you peace of mind.
How AWS Private Finance can helpThe best way to find a new mortgage deal is to seek advice from a whole-of-market broker such as AWS Private Finance. We look at all the products on the market to find the right one for your particular circumstances. We also have plenty of experience in arranging contractor and professional mortgages, knowing which lenders offer the most favorable terms to these borrowers. AWS Private finance have close relationships with the private banks. So if you require a large mortgage, we can explore this option too. Get in touch for more information.