HOMEOWNERS face a race to lock into a cheap mortgage after the Bank of England warned the era of low rates is ending.
Mortgages rates have been at a record low since official interest rates were slashed to 0.25% last summer. Mark Carney the Governor of the bank , signalled that the base rate could rise to 0.5% by next summer before reaching 1pc higher by mid 2020. A hike would mean a sudden increase in monthly repayments for millions of homeowners on variable and tracker rate mortgages. On top of this in September and October this year more than £35 billion of fixed rate mortgages will move onto variable rates.
Borrowers should be aware that mortgage product rates will start to rise BEFORE the Bank of England starts to increase rates. On top of this the uncertainty surrounding Brexit may cause interest rates to rise which is why an increasing amount of people are selecting 5 year fixed rates.
“Money Facts” have reported that re-mortgage rates have already started to creap up according to data from the first quater of 2017 and have made the following statement “The fact that some rates are starting to creep up for re-mortgagors is unwelcome news for those borrowers who have yet to capitalise on the heightened competition that has caused low rates to appear in the market”.
Please take this very seriously as delay could seriously affect your mortgage payments and put you at risk of higher monthly costs. In an era of rising inflation and low wage growth this is probably the best way to secure and in many cases reduce the monthly cost of what is for most property owners the largest monthly commitment.