How to protect yourself from the impending mortgage rate increase.

With financial experts predicting the Bank of England will raise the base interest rate at some point in the near future, it looks like we’ll soon be saying goodbye to the era of record-low mortgage interest rates. So where does that leave homeowners? 

Despite the Bank of England’s recent decision to keep the base interest rate at 0.1%, many in the industry point to the fact that an increase will soon be required to combat rising inflation. Some even predict a rise to as much as 3.5% by 2023.

Why does this matter to you and your mortgage?

The base rate is used by the Bank of England to dictate what lenders charge people who borrow money from them. Any increase will soon filter down to mortgage interest rates, and some lenders are already pre-emptively hiking their prices, and removing some of their deals.

How would a change in the base rate affect your mortgage?

For those on a ‘tracker’ mortgage which tracks the base rate, repayment costs will definitely go up.

For those on a standard variable rate mortgage, your monthly repayments may go up.

If you’re on a fixed rate mortgage, the rate you repay each month won’t change for now. However, when your product ends, you will likely find that the cost of remortgaging will have risen.

Currently, many mortgage providers are adjusting their rates in anticipation of changes, and at some point, probably soon, we could see some of the better deal products vanish from the market too.

Mortgage experts Evolve Financial Solutions have put together some points to help you plan your next moves.

What should you be doing now to ensure you continue to get a good deal from your mortgage?

First of all, don’t panic. Though it is likely interest rates will rise, it isn’t certain that we will see these huge jumps that some forecasters predict. A lot depends on outside influences, such as the employment market remaining stable post-furlough, and how well the economy in general continues to bounce back.

The first thing to do is to check how long your current mortgage scheme has left before it expires. You should also check on what kind of mortgage you have. If you’re on a tracker or standard variable rate, or your fixed rate mortgage is due to end soon, we recommend seeking the advice of a financial expert.

Evolve FS will secure you the best possible deal.

As independent financial advisers, Evolve can trawl the whole of the market to secure you the best possible mortgage deal. We can help you use every tool in your arsenal to mitigate any possible increases that may be on the horizon.

Whatever your circumstances, we will look at your current mortgage, compare it to what is available, and find a product offers you the least costs overall, while offering you the best protection from spiralling repayment costs.

With upward pressure on lenders to raise interest rates in the near future, now is the time to book your FREE consultation with Evolve FS or visit their website for further information.