A fast-changing mortgage market

The mortgage market has seen increasing interest rates over the past year and the base rate is now at 3.5%. Economists predict that the base rate could rise to around 4.25% by March 2023. The next interest rate decision will be held on February 2, 2023, and the Bank may raise rates once again.

Despite recent negative press around the housing market, there are still some good news stories for homeowners. The current stamp duty reduction and removal of mortgage stress-testing criteria are expected to make a difference on the affordability front. We have also seen mortgage rates start to come down over the last month.

In today’s market, it’s important to stay aware of your options as a homeowner. If you have concerns or are having difficulty making payments, talk to us – we are always here to help.

Mortgage Q&A

Due to the ever-changing mortgage market, we receive many inquiries from customers. We hope these answers to some common questions are helpful.

How will interest rate rises affect mortgages?

Fixed-rate mortgage

If you have a fixed-rate mortgage, your interest rate won’t rise when the base rate does; this means your payments will stay the same

We advise you to start talking to us as early as seven months before your fixed rate expires.

Many lenders issue offers that last up to six months, so you can secure a rate now, and take it in May 2023.

Tracker Mortgage or Variable Mortgage

Your payments will rise almost immediately after a base rate increase, as these products move in line with the Bank of England. When it rises, your payments will increase, and when it falls, your payments will decrease.

Right now tracker and variable mortgages are growing in popularity as lenders are offering competitive deals. Tracker and variable mortgages aren’t suitable for everyone, so it’s always wise to talk to one of our expert advisors.

Should I remortgage now?

If your mortgage is approaching expiry, it may be worth fixing the rate now for a couple of years, to avoid any further rate rises next year. When your current deal ends if you don’t remortgage to a new product you will then move onto the lender’s standard variable rate (SVR), which could be higher.

What can I do if I’m struggling to keep up with repayments?

Keeping on top of your mortgage repayments is vital to avoid negative consequences in the future. If you fall behind with your payments, you can become an ‘adverse customer’. This will damage your credit rating and make it more difficult for you to borrow money in the future.

If you’re struggling to keep up with repayments or you are concerned about future payment rises, there are some options we can look at in the short term. Please be aware that you may incur costs to make any changes to your current mortgage deal unless it is near expiry.

Talk to us

Our expert advisors are here to help guide you through your options and ensure you have the most suitable deal for your current circumstances.

please call us on 01543 464 144, or request a call back here.