Kevin Mills
Interest Rates
The Bank of England increased the base rate from 4.75% to 5.00% at their monthly meeting in November. In January the base rate was increased again to 5.25%. These increases have added 0.75% to interest rates since the summer. Some economic commentators feel that we will see further base rate increases in May this year as the Bank of England tries to squeeze inflation. If this does happen the base rate could be standing at 5.5% or even higher by this summer.
If your mortgage is a linked in any way to rises and falls in interest rates you will be seeing more money being taken out of your current account each month. Hopefully you will not still be paying the standard variable rate which for most high street lenders is in the region of 7.5%. If you are paying the SVR or if you are about to come off a special deal you need to ask your adviser to start looking at the options open to you.
There are fixed rates, discounted variable rates, discounted tracker rates, offset mortgages, capped rate mortgages and so on. There may be terms and conditions. You will have to meet lenders’ criteria. The size of the mortgage, the value of the property, your income and employment will all have a bearing on the mortgages available to you and picking the one which is most suitable. There may also be fees and charges.
But please don’t be like my friend who has shelled out something like £2,400 on interest he need not have since April. Yes, £2,400!! What a waste.
I totally understand people who live busy lives being disinclined to do the necessary to sort out their finances. But look at the potential savings! You might view it as a tax free pay rise. Inertia is not the answer. Call your adviser.
If you do not keep up your monthly repayments on your mortgage your home may be repossessed.
For more information contact Langtons today for an initial review with no charge or obligation.