Major bank is hiking mortgage rates TOMORROW adding hundreds to repayments – what you need to do now

[ad_1]

Thousands of homeowners are about to look at their monthly mortgage repayments after the Bank of England raised interest rates.

Bank increased base rate last week For the fifth time in a row, of interest, to 1.25%.

1

real estate house price graph UK pound symbolcredit: getty

Any homeowner with a variable or tracker mortgage As a result their monthly payment will increase.

Nearly 850,000 people with tracker mortgages will see immediate increase their pay Because the products are directly linked to the rate of BoE.

The rate increase of 0.25% is estimated to add £30 a month to a £250,000 mortgage with a term of 25 years, according to credit app Totalmoney – or £360 a year.

But even those with a fixed rate mortgage may find that their repayment is going to be more expensive, especially if they want to lock in a new deal.

We sold our car to help save a £20,000 deposit to buy our first home
Exact date of major mortgage rule shake-up revealed – how it affects you

With the base rate rising, many banks are pulling out their cheapest mortgage deals.

According to Moneyfacts, the average two-year term mortgage rate has increased from 2.09% in May 2020 to 3.03% today.

A typical five-year mortgage has increased from 2.35% to 3.17% over that period.

Halifax Intermediaries will increase rates by up to 0.5 per cent on many of their mortgage products from tomorrow.

These are the mortgages you can obtain using a mortgage broker.

Lewis Shaw, founder of Shaw Financial Services, said: “This time last year, Halifax had a two-year reprint deal available to 0.83% of buyers with a 40% deposit.

“From tomorrow, it will be 3.33% for similar conditions – showing how rapidly the market can change.”

The two-year fixed rate mortgage without any charges will increase from 3.24% to 3.66% for a buyer with a 10% deposit.

On a £200,000 25-year mortgage, the repayment at the lower rate would be £974 per month.

At the new higher rate, they would be £1,018 per month – an additional £528 per year.

The five-year fix will increase from 3.26% to 3.76%.

The monthly repayment on a £200,000 mortgage at the new rate would be £1,029.

what do you have to do now

If you’re already a homeowner, it’s worth checking out to see if you can Lock in your next mortgage deal now,

You may have noticed that rates are not as competitive as they used to be – but historically, they are still very low, so now is not the time to panic.

We Are Money’s founding advisor Jonathan Burridge said: “When I started in the industry, the interest rate at the mortgage lender where I worked was 15.75%.

“But it is no consolation to borrow to review its ultra-low fixed rate deals in 2022.

“Borrowers should look at their options, understand their budget and start planning for the next few years.”

Mortgage providers will usually let you Locked in a new deal of three months Before your current one expires – and in some cases, up to six months ahead.

This allows you to secure a mortgage before rates go up further, and means you don’t have to wait for your current deal to expire first.

You can either get a new deal with your current mortgage provider, or shop around to find a different lender that offers a better deal.

Anita Alvarez's coach took a dip in the pool to save her life after she fainted in the water
My kids' school told us to pay £142 for a new uniform - families can't afford it

One thing to note though is that often the deal goes through at what you agreed to, not when you actually move at that rate.

However, if you are staying with the same mortgage provider, it may be possible. switch to new rate First – so it’s worth asking.

We pay for your stories!

Do you have a story for The Sun Online Money team?



[ad_2]

Source link

Leave a Comment