Mortgage Market update for May
Adam Nanson from Your Mortgage Expert provides the Mortgage Market Update for May. Here, he talks about the latest decision by the Bank of England to increase the base rate. And what it might mean for your monthly mortgage payments.
On 5th May, the Bank of England increased the base rate to 1% from 0.75%. Their aim is to bring inflation down after the cost of living has risen sharply over the last year. Adam Nanson from Your Mortgage Expert in Salisbury comments on what this rise means for your monthly mortgage payments.
What should I do about my mortgage?
“Following the Bank of England base rate increase to 1% announcement, we have received lots of calls from clients asking what they should do about their mortgages. Should they fix, switch or stay is a question we often get asked.
“The answer, depends on the type of mortgage that you currently have. So, I’ll address each one in turn.
- Fixed term mortgages
Most of our mortgage clients have a fixed-rate mortgage. If this is you, then nothing will change with your existing deal. However, it is worth checking when your fixed term deal is due to end. If you are nearly at the end of your current fixed term, it might be a good idea to contact us to look for a new arrangement. As rates are changing at the moment, it might be prudent to lock in a new rate sooner rather than later. You can often lock in a rate up to six months prior to yours coming to an end.
- Standard Variable Rate mortgages (SVR)
If you are on the SVR, it’ll probably be because your fixed rate or tracker has ended. These can be more expensive than other types of mortgages. And, are likely to increase now the base rate has gone up. With this in mind, it might be worth getting in contact with your mortgage broker to see if you can change to a fixed term rate or something cheaper.
- Tracker mortgage
These track the base rate, so your monthly mortgage payment will increase. You will probably have picked a tracker rate because the base rate has been so low for quite a while now. If you are worried that your payments might be too much now, then get in contact with us. We will look to see whether we could save you money on a different arrangement such as a fixed rate. We can also look to see if you have to pay any penalties such as early repayment charges for switching.
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.
Have you read something in the Mortgage Market Update for May that you want to talk to us about? If you 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.
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