After increasing the Bank Rate to 2.25% in September, the Bank of England (BoE) has since said it will ‘not hesitate’ to hike rates further to curb inflation.
Changing rates have a significant impact on the amount you repay on your mortgage. Those on a tracker mortgage will see their rate increase (or decrease) directly in relation to the Bank Rate. Standard variable rates (SVR) also rise or fall according to this rate.
Is now the time to fix?
Fixed-rate mortgages, on the other hand, are protected – for now. If you’re on a fixed-rate deal, you won’t see any changes in your mortgage until your plan ends. But when it does, you will automatically be switched to your lender’s SVR, which will probably be more expensive.
If you are tempted to take out a new fixed-rate deal, you also need to be aware of any penalties you might have to pay for leaving your current deal early.
Rising rates are prompting more people to carefully consider their options. Everyone’s circumstances are different, which means it is always best to seek personalised advice. Get in touch today to find out how we can help.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.