Time to Fix Your Mortgage Rate
With mortgage rates at an all time low and the Bank of England base rate predicted to rise in early 2016, you will probably never get a better chance to fix your mortgage at a low rate.
Fixed rate mortgage rates are at an all time low. This is partly due to the low the interest rate, but also because the mortgage lenders and cutting their margins in a very competitive market. You really can shop round for the best deal.
Whilst Bank of England Interest rates continue to be low they are predicted to increase in 2016, perhaps as early as February. It is also likely that following an initial interest rate rise there will be further increases to follow. Although it is easy to ignore this forecast, particularly with so many predictions of interest rate rises over the last few years proving wrong, there appears to be more reason to heed this latest forecast by the Bank’s head, Mark Carney.
Whilst many economists suggest that the situation in China, where the stock market has plummeted recently, will delay the increase in the Bank of England’s base rate, recent comments by Carney on the strength of the UK economy indicate that he does not agree.
For people with mortgages linked to the Bank of England Base Rate this means that your monthly mortgage payments will increase. For people with a £100,000 mortgage over 25 years, a 0.75% interest rate rise will mean you are paying an extra £480 per year.
If you are tied in to a fixed rate mortgage, however, your repayments will stay the same and you will be cushioned from that interest rate rise. Those low mortgage rates will not be available indefinitely. They are likely to start creeping up as forecasts predict imminent interest rate change and they will go up overnight when the rate does change.
Given the time it takes to get a mortgage – even a remortgage – it really is worth starting the process now to book one of these low rate mortgages. It is inevitable that the interest rate will rise sometime and most probably within the next year. After that there is likely to be further incremental rises. If you have been wondering whether to fix your mortgage rate, there is no time like the present.