The Bank of England is expected to increase interest rates in the next few months.
If the committee votes for an increase of 0.25%, it will take the Bank’s Base Rate from 0.5% to 0.75%.
With inflation coming down and employment levels increasing, it is likely to be the last hike in 2018.
But what does a potential rise in interest rates mean for mortgage holders and those looking to get a mortgage for the first time?
If you are a mortgage holder on a lender’s standard variable or tracker rate, you will see a relatively small increase in your monthly repayments.
A 0.25% rate rise means someone on a £200,000 mortgage would pay around an extra £25 a month, or about £300 a year.
Mortgage lenders currently have some very competitive deals, as they vie with each other for more customers. This is good news for consumers.
There are some products on the market now with an interest rate as low as 1%, including high street lenders such as HSBC and Barclays.
If you are coming to the end of your fixed mortgage deal, are on a standard variable rate or are looking to buy a home for the first time, now is a great time to review your mortgage options.
Those looking to re-mortgage may find they can save hundreds of pounds per month on their repayments but speaking with a mortgage broker now.
Michelle Niziol’s article also appeared in The Oxford Times property supplement on page 5. Read the article here