What should you do if you’re worried about your mortgage?
With many people already facing increasing financial pressures with the soaring cost of living, the Bank of England’s decision to raise the base rate to 3% will only add to the worry of those with existing mortgages or who are in the process of buying a home.
With many lenders putting their rates up – according to Moneyfacts, between September 23 and October 20, the average rate on a two-year fix increased from 4.74pc to 6.65pc – or even withdrawing their mortgage products altogether, this has created a huge amount of uncertainty for homeowners.
The Bank of England advised that, following the base rate increase in November, many homeowners could see around £3,000 per year added on to their monthly repayments if they were set to renew their mortgage.
So what can you do if you’re anxious about your existing mortgage and the repayments?
Don’t go quiet – talk to the experts
The worse thing you can do if you are worried is ignore the problem or suffer in silence. Talk to a professional mortgage broker to understand what your options are, they can advise you on the best solution based on your own personal circumstances.
Some of the options available to you could be extending your mortgage term to reduce your monthly costs, or re-mortgaging to either gain a better rate to save money or fix the rate to give you more financial stability.
Gaining better financial security
Given your mortgage is probably one of your largest monthly outgoings, knowing that it won’t be increasing any time soon can help reduce the sleepless nights and make you feel more in control of your finances.
If you are currently on a tracker mortgage, which up until the last year or so were great value, you unfortunately will be seeing your repayments go up, month on month, as the Base Rate rises.
Switching to a fixed rate mortgage can remove this worry. By talking to a mortgage broker, you could secure a good rate which can be fixed over set period of time, meaning that your repayments remain static for the agreed term – this could be over two, three, five or even ten years.
If you are already on a fixed rate but the deal is coming to an end in the next six to eight months, now is the time to start looking for a new mortgage. Rates and offers can be secured up to six months in advance and will make sure you don’t revert to the lender’s SVR, even for one month.
The longer-term fixed offers could be an option in these uncertain times if you have no plans to move. However, beware of tying yourself into the longer deals if you are unsure of your future plans, as there can be large penalties if the terms are broken early.
Seeking professional advice
If you are unsure as to what the next move should be for you when it comes to your mortgage, or what the best offer would be for you and your circumstances, then talking to a professional mortgage advisor is crucial.
At Mother Goose Mortgages, we have over 20 years of experience and will always give you the expert advice and guidance you need.
As a member of one of the UK’s largest award-winning mortgage networks, we can offer you a comprehensive range of mortgages from across the market, in addition to exclusive mortgages not available from high street banks and building societies.
Talk to us today on 01892 862534 to see how we can help you.