The Bank of England has once again voted to raise the base rate of interest, from 4% to 4.25%. The Monetary Policy Committee, responsible for determining the rate, says the rise is necessary due to higher than anticipated inflation.
So, what does that mean for your mortgage?
The good news is that because most lenders predicted this increase, we don’t expect there to be a significant rise in mortgage rates throughout the market. In fact, Nationwide Building Society has announced they will be reducing some fixed and tracker rates by up to 0.45%. However, over time, we might see a rise in rates as lenders react to the market conditions.
If you are due to remortgage, our best bit of advice is this: don’t wait and see.
Many economists predict that this will be the last increase to the base rate for a while and that we should see it begin to fall towards the end of this year. It’s important to remember, however, that lenders are much quicker to react to an increase in base rate than a decrease – meaning that while we might see lower rates in time, they will come down a lot less quickly than they went up.
We recommend getting in touch with your mortgage adviser at least six months before your mortgage is due to renew. At that point, you can secure the best available deal, but we can help you to review the market again before completion. That way you’re guaranteed to get the best rate for your circumstances.
Remember: mortgage rates are predicted to fall towards the end of this year, but we don’t yet know where they will peak. Just because they fall, does not mean they will be lower than the best rate you can secure now.
Be proactive. Get in touch with our mortgage advisers and let us help.
