It won’t have missed your attention that the Bank of England Base Rate has increased once again (this time another 0.5% taking it up to 3.5%). We take a really quick look at what this means in the grand scheme of things, and why its best not to panic just yet!
So, on the 15th December 2022, the Bank of England base rate rose to 3.5% – The highest level in 14 years. It’s natural to worry, particularly if you already have a mortgage or are looking to source one soon. But, we are seeing a different picture in the world of mortgage brokers.
Those on Fixed Rate Mortgages with a deal coming to an end and looking to limit the increase in payments are still benefitting from fixed rates moving downwards rather than up. As a perfect example, we arranged a fixed rate product transfer for a client back in November to secure a rate in case rates went sky high. Today, we have changed the product as a result of reductions in that particular lenders rates and instead of a rate of 5.44%, we have secured a rate of 4.79% – a drop of over 0.65%. That’s a reduction in their deal greater than todays increase.
For those on variable deals, we are starting to get the responses in from the lenders, and those that have communicated so far are noting that the rates for those clients aren’t going up immediately. Santander (for example) have announced that they will increase their variable rate products (including Alliance and Leicester) by the 0.5%, but at the start of February (which means payments won’t change until March 2023).
For those who haven’t reviewed their mortgage deal, or are due to review within 6 months (particularly if you are on a lenders Standard Variable Rate), now is a really good time to get a review. As always, we don’t charge unless we get you a mortgage.
Head over to our Contact Page or visit our Facebook Page to get in touch and discuss your options.