With so much uncertainty at the moment, one of the big questions being asked is when will interest rates rise?
Unfortunately, we don’t have a crystal ball to tell you when this might happen. What we can say though, is it’s not really a question of if but when. Interest rates are as low as they can get and at some point will rise.
There’s speculation that this could be before Christmas.
We know that this is a worrying prospect for some mortgage holders, so what can you do about it?
- Check your current mortgage deal. You need to know what rate you are currently paying and if that is fixed until a certain point.
- Calculate how an interest rate rise would affect your monthly mortgage repayments. As an example, someone with a £200,000 mortgage currently paying 1.5% (based on a 75% Loan to Value) with repayments of £800 would see their payments rise to £848 if rates increase by 0.50%. This adds up to £575 extra a year.
- Are there any savings that you can make? We’ve written before about quick ways to save money (https://www.mortgage-consultancy.co.uk/five-quick-ways-to-save-money/) It might be possible for you to make a saving that covers the increase in your mortgage repayment
- Talk to us about a new mortgage deal, if you have less than six months left on your current mortgage deal, this is definitely something we should do as soon as possible. Even if you have six to twelve months on your existing rate, it’s worth starting to see what is available. Some lenders that we work with will let us ‘book’ a rate with them several months ahead of time. This could prove invaluable if rates do start to rise
Remember we are always happy to answer your questions so if you, or someone you know is worried about a potential interest rate rise, please get in touch as soon as you can.
