There has been much talk of recession in recent weeks. Interest rates are at their highest since the 1980s with the UK forecast to fall into recession once again. The last recession was in the late 2000s at which point the effects were felt by many. The Bank of England are due to meet again on the 15th September, at which point they are likely to raise interest rates again. What could this mean for you and your mortgage payments and why is it so important to make sure you are on the best mortgage deal?
We take a look at how fixing your mortgage, and finding the best deal, can give you peace of mind and ensure that you can plan your finances for years to come.
EXAMPLE OF WHAT COULD HAPPEN
Let’s take a look at what could happen if interest rates continue to rise and give you an example of what could be achieved with a 25 year mortgage deal scenario.
Property value – £350,000 – mortgage balance of £262,500 with a 25% deposit – 75% loan to value.
If the mortgage was on a lender’s standard variable rate, currently an average of 4.74%, your monthly repayment would be £1,462.93.
With a standard variable rate, you have no security that this won’t increase.
WHEN INTEREST RATES CHANGE
If the interest rates were to change, your monthly instalments could either decrease or increase. If the interest rate were to rise to 10.99%, the payments could increase to a huge £2,367.62. That’s an increase of £904.69 per month – a significant amount.
If you act now and let us help, we could potentially secure a fixed interest rate of 3.36% meaning that the monthly payments could be fixed at £1,299.44. Not only does that mean you won’t be paying more than what you are currently paying, it actually offers you a monthly saving of £163.49 of the above example,
With some lenders now offering ten year fixed mortgages, this could give you some peace of mind for some time to come.
ACT NOW AND SECURE A MORTGAGE OFFER
A mortgage offer is actually valid for 6 months. This means if your fixed rate is not due to come to an end until Jan 2023, you can secure a good deal now. Securing a rate now means you won’t be penalised if rates should increase further.
STRUGGLING TO MAKE ENDS MEET?
Rising interest rates not only have an impact on your mortgage payments but also on loans and credit cards. If you have credit cards, an increase in interest rates can see you paying higher monthly repayments. Add this to an increase in living costs with energy bills, fuel prices and groceries and, you could find yourself struggling to make ends meet. At Buzz Financial, we can help with debt consolidation if you do find monthly cashflow an issue.
FIND OUT HOW WE CAN HELP
Our team of experienced experts have access to the whole of the mortgage market and can find you the best deals to suit your situation. We can also help with other aspects of your finances too including equity release, home insurance, life insurance and debt consolidation. Simply give us a call on 01934 756717 or get in touch and discover how we can help you. Act now, save money and secure peace of mind for the future.
A mortgage is a loan secured against your home. Your home is at risk if you do not keep up repayments on your mortgage or any other debt secured against it.