Worried about the mortgage Interest Rates?
The Bank of England have announced a further rise in mortgage interest rates from 0.5% to 0.75% which is the third increase in the last quarter causing alarm to many homeowners. We spoke to Pearson Solicitors head of conveyancing for some advice.
Who will be most affected by the rise in mortgage interest rates?
Any rises in mortgage interest rates will immediately affect those who are on a standard variable rate; a tracker mortgage and those coming to the end of a fixed term mortgage.
Conveyancing Solicitor Victoria Marshall advises not to panic!
“The news outlet do have a habbit of painting a very scary picture of increases that are occurring in the property market however, good planning and taking the right advice can ensure that such increases will not affect you as much as you thought, and remortgaging could be the answer for some.”
As with energy providers, supermarkets and vehicle and home insurance products, it is sensible to shop around for a new mortgage product to make sure you are getting the best deal, especially with the hike in energy bills, fuel, and food costs. The same mindset should apply when it comes to mortgage providers as there could often be a better deal to be had by switching lenders.
Let's discuss fixed rate mortgages
When taking on a fixed term mortgage, you may have signed up to a two-to-five-year fixed term. Keep a careful eye on this as the years soon pass and before you know it, your fixed term has expired, and you could be automatically switched to a standard variable rate which is most often higher than other rates available.
Victoria Marshall says “Many people make the mistake of staying with the same lender as they do not feel they will get another mortgage. The only way to find this out is to speak to a mortgage broker. The right broker will be able to source a deal that works for you as staying with your existing lender could mean you are squandering an opportunity and more than likely, missing a better deal that could save on your monthly repayments.”
“By planning ahead, knowing when the fixed rate is due to end, you can contact reputable mortgage advisers who can begin to search the market for the best offer.” she adds
Am I liable for any mortgage exit fee?
If you are looking at ending your existing deal earlier with your current mortgage lender, then you need to be aware of the associated fees and penalties that you agreed to at the outset when you signed the mortgage offer. You will need to adhere to these terms and conditions which could include early repayment charges and exit fees which could go into the thousands.
How can we help
We act for clients in and around Greater Manchester and further afield with their mortgage and remortgage transactions. Contact our experienced Conveyancing Solicitors on 0161 785 3500 or alternatively, let us provide you with a Free Online Instant Remortgage Quote.Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.