Mortgage Borrowers Urged to Act Fast to Avoid Future Rates Hike
Interest rates tumbled to an historic low during the coronavirus pandemic, but they were unlikely to stay that way forever. And with the Bank of England hinting that a rates rise is likely in the “coming months”, mortgage borrowers are being urged to act fast to avoid getting stung by an interest hike.
Lenders had already started to up their rates in anticipation of a base rates shift, with Barclays, HSBC, NatWest and TSB doing so right after Chancellor Rishi Sunak’s latest Budget speech, but those with tracker mortgages will feel the pinch immediately.
The interest rates available for new and existing customers are already showing signs of creeping up. According to The Telegraph, they’ve spiked by around one third over the last week alone, and are expected to continue to climb in line with the Bank of England’s base rate.
With this in mind, experts are advising new mortgage applicants and homeowners in the market for a remortgage to act now and start their applications while rates are still relatively low.
Ashley Thomas, director at London-based mortgage brokerage Magni Finance said: “The main trend we’re seeing at the moment is that rates are increasing. They have all been going up over the last two weeks and are likely to increase further over the next couple of months.
“If you want to secure a fixed-rate mortgage, it is best to go for it now while you can. Whilst there are still some rates below 1% per annum, I doubt there will be in three-to-six months.”
Online Mortgage Advisor’s managing director, Pete Mugleston, also believes that now is the time to act for anyone who’s concerned about the impending rates rise.
“Borrowers on tracker mortgages and standard variable rate agreements are likely to see significant savings by entering a new fixed-rate mortgage while rates are still low,” he said. “If you’re worried about the impact of the Bank of England’s base rates increase, the best thing you can do is speak to a mortgage broker today and get the ball rolling on your application.”
The Bank of England’s potential base rate increase – which was hinted at on Thursday 4th November – is tipped to be one of several, with finance experts forecasting that the base rate could reach at least 1% by the end of next year.