In the first back to back interest rate rise since 2004 the Bank of England has announced a rise in the base rate from 0.25 to 0.5%. The Bank of England’s chief economist has also warned that we should expect future rates to rise further.
The move means that around two million homeowners with variable rate mortgages will see their monthly repayments rise. The change will add around £24 a month to repayments on a £200,000 mortgage. This has put even more urgency on homeowners reviewing their current mortgage terms, seeking fresh financial advice to secure a fixed term mortgage before further increases occur.
We have also seen a large number of homeowners seeking their next home move keen to lock in a fair, fixed rate mortgage on a property with a higher price tag.
Devon based Estate agents Complete Property, speak to home movers on a daily basis and have witnessed a strong inclination among buyers to upgrade their current home and secure a healthy fixed rate mortgage before further increases occur.
“With the interest rate having risen at the end of last year, again this week and further rises predicted we are witnessing many home movers Choosing to take on fixed rate mortgages over the previously popular variable and tracker rates in order to provide security and peace of mind at this challenging financial time. We have also seen homeowners take the increase in the base rate as an opportunity to purchase a larger or more expensive home in order to lock in a specific mortgage rate sooner, rather than later.” – Ben Winterbotham, Branch Manager, Compete Property.
The property market is currently booming, with homes being snapped up at unprecedented rates and it is vital that purchasers make the right decision for them concerning the mortgage product they choose.
With a range of mortgage brokers offering a wealth of advice surrounding the mortgage market, now could be the time to review your mortgage product to ensure that it is aligned with your spending power and financial outlook over the next few years.
If you’re struggling to find a mortgage broker or are unsure where to start Complete Estate Agents are able to point curious homeowners in the direction of a broker they work with for free, unbiased advice.