04 Jul Interest Rates – What you need to know | Hardisty Financial
As a homeowner, mortgages are important, but we understand they can be difficult to understand. Whether you are buying a new home or thinking about re-mortgaging, we are on hand to help you through the process.
What is happening to interest rates?
With inflation rapidly rising, the Bank of England has increased interest rates in an attempt to slow it down – higher interest rates encourage saving so the rise in costs declines. Interest rates are predicted to continue to rise throughout 2022.
How does this impact my mortgage?
As interest rates rise, it becomes more expensive to borrow money. This means that your mortgage payments will rise, so over the course of your mortgage you will spend more. However, this is dependent on the type of mortgage you have.
With a tracker mortgage, mortgage rates rise in line with interest rates. With a variable rate mortgage, mortgage rates may be influenced by interest rates, but it is at the lender’s discretion.
What can I do?
Choosing a fixed rate mortgage is the best way to protect yourself from increasing interest rates as your mortgage rate will be locked for a duration of your mortgage. If you are currently on a variable rate mortgage, you may want to consider moving to a fixed rate.
For advice on mortgaging or re-mortgaging your home, contact us now.