Our founder and Managing Director, Monica Bradley, explains why it may be worth having a discussion about your mortgage.
During these challenging times, with the cost of living and interest rates going up, it’s natural to worry about money. You may be concerned about rising fuel costs and troubled by the fact that even basic everyday items, like food, are more expensive.
While many people are tightening their belts and cutting back on going out and trying to reduce their grocery bills, it’s also important to think about your mortgage. By looking into it, you could make a saving.
What will happen to your mortgage?
If your mortgage is on a standard variable or tracker rate, you’re at the mercy of the Bank of England and its base rate rises. When the base rate goes up, so will your monthly mortgage payments. The base rate increased from 0.25% last December to 1.75%. It may go up again in September. If you are on a variable rate mortgage, I strongly advise you to contact us and see if we can switch you onto a new deal at a lower rate that could save you money. It’s definitely worth a conversation.
If you’re on a fixed rate mortgage, you’ll be currently unaffected by the base rate rises until the fixed term ends. If your fixed-rate term is due to come to an end in the next six months, get in touch with us now, and we’ll shop around for you. Otherwise, when your fixed rate term ends, your lender will place you on its standard variable rate, which is likely to be higher. The more time we have to explore your options, the better.
If you’re thinking of moving, you may be wondering what’s likely to happen to house prices. Asking prices dipped by 1.3% in August, according to Rightmove, but the property website believes this dip is seasonal and due to the summer holidays. Rightmove anticipates that prices will recover when people get back from their summer breaks.
While rising interest rates and the increased cost of living could slow the market down, there is still a continued race for space, and many people are eager to live in new areas due to recent work and lifestyle changes.
The Bank of England has predicted house price growth to slow down this year, and some experts are more optimistic than others, but ultimately, if you want to start afresh and move house, then you have to do what is right for you.
That said, if you are one of many deciding to move after your life was disrupted by the pandemic, make sure you’re not merely reacting to the unusual events of the past two years.
If you intend to move, ensure you’ve done your homework on the area and also the property you have in mind, so you don’t have any regrets later on. Half of those who bought a home during the peak of the pandemic regret how much they paid, according to a survey from Aviva. Buyer’s remorse can be common – don’t let it happen to you. By all means, move if you want to, but ensure you’ve done your research carefully.
We’re here to help with advice on your mortgage.