Chat with us, powered by LiveChat Interest rate rises: How will this affect my mortgage? - London Mortgage Partners

Interest rates have been a hot topic in the property world (and beyond) recently!

 

Soaring inflation and wider global uncertainty have forced the Bank of England to act and we have seen policy makers increase the Base Rate consecutively for the last three months.

 

The current Base Rate has increased from 0.1% to 0.75%.

 

What does this mean for my mortgage?

 

Although not directly corelated, the rise in the Bank of England Base Rate has seen a unilateral rise in mortgage interest rates across the market.

 

It is important to point out that even when accounting for recent rises, mortgage rates within the UK are still very low comparative to historic norms. Furthermore, any rise seen on mortgage products is not directly proportionate to the rise applied to the Base Rate, i.e. a 0.5% rise in the Base Rate might see lenders increase their mortgage products by say 0.3%.

 

If you are on a tracker product, then you will be directed affected by the recent rises. You will see a rise in the interest rate applicable to your mortgage, hence your monthly payment will also rise. Your lender/broker should be able to confirm the exact details directly with you. You may wish to look to fix your mortgage product to ensure that you are protected from additional rate rises in the future.

 

If you are on a fixed rate product than your current mortgage product and therefore mortgage payments will remain unaffected. If you current fixed rate is due to expire shortly, you should speak to someone to ensure you are reviewing your options early as these may change.