5 Top Tips if you are worried about rising interest rates and your mortgage
The UK Mortgage Market is seeing a high level of volatility at present. With inflation levels currently 7.1% above the Bank of England’s target, rising interest rates are a real threat. Mortgage lenders are withdrawing their product range with very little notice and repricing citing market conditions as the reason. With the next interest rate announcement in August, here are some steps that you can take to ensure you stay ahead of the game if your mortgage is maturing in 2022.
1) Know the date your current deal ends
It is important to know when your current deal ends. In most cases, if you do not take action, your lender may move you onto a higher standard variable rate. Knowing the date your mortgage ends allows you to make plans in advance.
2) See what your current lender is offering
When your mortgage deal expires, it is prudent to enquiry with your current lender about what they will offer for you to remain with them. You could do this yourself or alternatively, a mortgage broker could do this on your behalf. You then have a benchmark to compare options from other lenders.
3) Know how long your current lender will allow you to arrange a new deal prior to your deal expiring
Most mortgage lenders will allow you to secure a new deal 3-6 months before the end of your current mortgage deal. Therefore if you are worried about rising rates, this could give you the opportunity to secure your deal sooner rather than later.
4) Consider the rest of the market
As well as staying with your current lender, also consider what the rest of the market is offering. Some lenders have a 6-month offer period which means you could secure your new deal well in advance of your expiry. Also the terms a new lender offer may be preferable.
5) Allow yourself plenty of time
In the current market, it may be wise to start considering your options 3-6 months before your current deal expires. If your best option involves your remortgaging to another lender, this could allow time for the remortgage process. For example, the mortgage application to the new lender, valuation, and necessary legal work to conclude the transaction.
With the real concern of rising interest rates and an increase in the cost of living, your mortgage payment is usually the largest household commitment. Make sure you take the steps to ensure you put yourself in the best possible position when it comes to your mortgage renewal.
This article is for information purposes only and does not constitute advice. The author accepts no liability for any errors or inaccuracies. Seek professional advice to discuss your own situation.