Bank of England announces latest interest rate rise
The Bank of England has today announced that interest rates will rise from 1.25% to 1.75%.
With inflation continuing to soar far above the 2% target, and predicted to peak at 13% at the end of this year, the Bank of England feels raising interest rates is necessary. Higher interest rates discourage spending and borrowing, and so should curb inflation. However, this can take months to have an impact and so we will all likely feel a squeeze on our incomes over the next few months, particularly as the cost of living and energy prices continue to rise.
So, what does this mean for your mortgage?
If you’re on a variable rate mortgage, your monthly payments will go up. If you’re concerned about your ability to make your payments, contact your mortgage provider as soon as you can.
Fixed-rate mortgage-owners won’t see a rise in payments, but if your rates are maturing soon you are likely to see an increase. We expect that interest rates will rise again this year, so start talking to us about remortgaging about six months before your rate is due to expire. Most lenders provide a six-month window between providing you with an offer and completion. Additionally, the rate is secured with your lender no later than on your new application being submitted.
We’re also seeing that lenders are changing their rates on a more frequent basis, with many making increases to their products before these increases are announced. Today, with a larger single increase to what has previously been announced this year, it is however likely that many lenders make reactive changes, and further increases, very soon. If you are thinking of applying for a mortgage soon or your current deal finishes within the next seven or eight months, begin the process now.
We know obtaining a mortgage can be a stressful time, and for many this will be their first experience of a cost of living crisis on this scale. To speak to someone about your mortgage or get advice on what to do next, please get in touch by calling 01823 273880 or by clicking here.