The economy is in recovery mode with unemployment falling faster than predicted and growing confidence in the housing market. But while welcome, this is leading to fears that interest rates will rise sooner rather than later.
The repositioning of Funding for Lending Scheme monies away from individual mortgages towards small businesses is also fuelling concerns that this will push up mortgage rates.
But it’s important not to panic. While we don’t expect interest rates to rise this year because the economic recovery is still extremely tentative, rock-bottom mortgage rates can only really move in one direction – upwards. However, a bit of forward planning and reviewing your finances – and when better to do this than at the start of a new year? – will ensure you don’t pay more than you need to.
Many of our clients are particularly interested in five-year fixed rates. These give security for the medium term but ensure borrowers don’t have to lock in for too onerous a period. There are some excellent fixes available, with rates starting from 2.69% (4.2% APR). Alternatively, if you prefer a base-rate tracker, rates start from 1.49% (3.6% APR).
It is important to chat through the options to ensure you get the right mortgage for your circumstances. Even if you have several months to go until the end of your current deal, it is not too early to start looking around. It may be possible to secure a rate several months before you need it, depending on the lender. If mortgage rates have risen by then you will be very glad you did so.
Contact us for more details.