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Interest rates are expected to go up again this week with the Bank of England’s monetary policy committee (MPC) meeting on Thursday.
A number of homeowners will be hit by higher mortgage charges if the Bank of England bosses press ahead with the rate hike. Most analysts are expecting the Bank’s base interest rate to be hiked from 3% to 3.5%, which would be a 14-year high.
However some economists are now predicting the base rate hikes will top out at around 4%. And with most tracker deals still significantly cheaper than current fixed rate deals, many of our clients are opting to take a tracker mortgage over a fixed rate.
This is being seen in other market data too, with one stat showing that 35% of borrowers took a tracker mortgage in November compared with just 8.4% the month before.
What is a Tracker Mortgage?
A tracker mortgage is linked to the Bank of England base rate. This can change up to eight times a year.
The interest rate you pay will be the Bank of England base rate plus a certain percentage. This will depend on the type of deal you get and repayments can go up or down each month.
At the moment tracker mortgages are lower cost than fixed rate mortgages, for example a Natwest 2 Year Fix is 5.87% but the 2 Year tracker is only 3.59% BBR + 0.59%). Additional costs and early repayment charges apply during the initial rate period.
Is your mortgage coming up for renewal?
If your mortgage product is coming up for renewal in the next 6 months, we encourage you to get in touch with our mortgage brokers. We can assess your circumstances and recommend the most suitable product for you.
And with our new “FlexiLock” approach, we will continue to monitor the product right up until the mortgage goes live. If we find a lower overall cost or more suitable product for your circumstances, we will switch the product over. This may sometimes incur costs such as new valuation fees and any fees already paid may not be refunded.
Lets explore the best rates for you
Speak to our award winning brokers. Get started by clicking the Schedule a Call button or call and speak to our senior broker, Danny O’Keeffe today on 0208 364 3444.
Chancellor meets mortgage lenders to hash out cost of living support
Chancellor Jeremy Hunt, last week, met with major mortgage lenders, the Financial Conduct Authority and Money Saving Expert’s Martin Lewis.
Lenders agreed that they would allow customers who are up to date with payments to switch to a new competitive mortgage deal without another affordability test and provide information to help customers plan ahead when their rate ends.
Rightmove finds average asking prices fall as year ends
Average price of property coming to the market drops by 2.1% (-£7,862) this month, a bigger dip than usual at this time of year as some determined sellers price aggressively to tempt hesitant buyers says Rightmove.
Rightmove forecasts that prices will drop by an overall average of 2% next year as a multi-speed hyper-local market emerges, with some locations, property types and sectors faring much better than others.