Archive: How will the Interest Rate Rise impact your mortgage?
16th August 2022: On 4th August, the Bank of England increased the interest rate to 1.75%. This widely anticipated rate rise is the largest increase for 27 years and leaves lots of people wondering about mortgage rates and house prices. In this article, we address how will the interest rate rise impact your mortgage and house prices.
Why has the Bank of England increased the interest rate?
“Prices globally are rising at a staggeringly fast rate. Oil prices, gas prices, the cost of food and household goods have all gone up. One way the Bank of England can try to control prices (or inflation) is to put up interest rates.
“It remains to be seen whether this will have any impact on spiralling inflation. And, we don’t know whether this will be the final rate rise this year.”
Will the Interest Rate Rise impact your mortgage?
Adam Nanson continues:
“The interest rate rise will make borrowing more expensive. And, the idea is that this will help to curb spending and drive down prices.
“Most of our mortgage clients have a fixed-rate mortgage. If this is you, then nothing will change with your existing deal. If, however, you are on the Standard Variable Rate or a tracker mortgage, you will find that your mortgage repayments will increase.
“If your mortgage deal is coming to an end, or if you are on a tracker mortgage, it might be worth contacting us to find out if you can change to a new fixed term rate or something cheaper.”
Will the Interest Rate Rise impact house prices?
Adam Nanson further comments:
“According to Nationwide, house prices are continuing to rise, although more slowly than in recent years. But with mortgage borrowing becoming more expensive, it could lead to a slowdown in the market. This could be good news for buyers and less good news for sellers.
“We will, of course, be watching the markets carefully. If you want the latest information and the most informed across market understanding, we would recommend you speak to an impartial mortgage broker like Your Mortgage Expert.”
Searching the market yourself can be time-consuming. But with our help, we can search thousands of mortgages, including exclusive deals and lenders that you wouldn’t otherwise have access to. We have regular contact with a wide range of lenders, some of whom you may not even know exist! With our help, you won’t have to search or contact each individual lender in order to compare the mortgage terms and rates; we’ll do all that for you.
If you are worried about how the interest rate rise will impact your mortgage. and are interested in having a no obligation chat about your mortgage, why not get in touch? We don’t charge anything up front, so by speaking to us, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.
Simply call us on 01722 322683 or complete a contact us form on our website and tell us when it would be best to get back in touch with you.
The information contained within this article was correct at the time of publication on 16th August 2022. It is intended for information only and does not constitute advice. Your Mortgage Expert Ltd and Mortgage Advice Bureau cannot be held responsible for information that was correct at the time of publication but subsequently changes or goes out of date due to changes in legislation.