At the heart of the should I change my mortgage question is the worry that interest rates will soon be increasing.
How likely is an interest rate rise?
Driven by higher energy and transport costs, the UK Consumer Prices Index rose by 4.2% in the year to October – the biggest jump in the index since November 2011.
With UK inflation at now a 10-year high, the stage is set for an interest rate rise within weeks.
Despite no change in the Bank of England’s base rate, Barclays, HSBC, NatWest and TSB have all increased their mortgage rates in the past few weeks, adding hundreds to the cost of borrowing.
Once the Bank of England does act – which is likely in the very near future – mortgage costs will almost certainly jump higher.
How high will interest rates go?
Expectations for rising mortgage costs predicted by the Office for Budget Responsibility (OBR) were buried in the Budget documents. They suggest that mortgage interest payments could rise by 13% in 2023, reaching a peak of 14.8% in the second quarter of that year. If correct, homeowners with the average mortgage of £211,000 could see their payments go up by more than £500 a year.
This is a stark warning, and with mortgage rates already going up, homeowners may want to act soon to lock in lower costs. Those on variable rate mortgages should act now as these will be hit the worst when rates rise.
Specialist mortgage advice from Chase de Vere
Our specialist team of mortgage advisers are here to help. With their in-depth knowledge and experience they can search the entire market to find the best solution to meet your individual needs.
From application to completion, a dedicated mortgage adviser will be with you every step of the way – to help save you time, money and avoid potential disappointment when applying for a mortgage.
To talk with a member of our mortgage team, call 0800 526 091 or request an appointment online.
- A fee may be charged depending on your circumstances. This fee will be no more than £499 and will be explained by your adviser.
- Your home may be repossessed if you do not keep up repayments on your mortgage.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.