Well, it would be good wouldn’t it? Imagine if your postman only delivered birthday cards, well wishes and refunds from your utilities supplier. We can dream!
If you’re on a tracker or variable rate mortgage it’s likely that your friendly postman has recently delivered a letter from your lender to let you know that your monthly mortgage repayments are increasing.
The recent interest rate increase to 0.75% was only the second one in over a decade, but it will have consequences for an estimated 35% of those with a mortgage; the percentage believed to be on a variable rate. This means that for those with a £200,000 loan, monthly repayments will increase by £25 per month. This doesn’t sound like a huge amount, however that’s another £300 per year, with more rises likely in 2019. Meanwhile, Experian suggest that the average household will be £400 per year worse off.
The increase in interest rates means that there is an uplift on the interest paid in savings, but increases are minimal and will not recompense mortgage payment increases. There is good news though!
Mortgage rates are still very competitive, and it is possible for a whole-of-market broker, like Mortgage Search Go, to source excellent fixed-term deals. We expect interest rates to continue to gradually increase and as a result, lenders continue to offer fixed-term mortgages over 5 and even 10 years for those borrowers who want to know exactly what their payments will be for an extended period of time. This is particularly useful when a household experiences a period of increased variable cost such as starting a family. Securing a fixed-rate mortgage ensures that the level of disposable income remains constant and provides a level of comfort when it comes to household finances.
If your postman didn’t bring nice don’t set the dog on him! Call a member of our team on 0844 69 333 60 for a free, no-obligation discussion.
Please note: Your home may be repossessed if you do not keep up with repayments on your mortgage.