The BOE Base Rate has increased! How does this affect you?

Hey! Steve here!

So, the Bank of England rate has only gone up 0.5%. Well, after rumours were suggesting a 0.75% increase, we've been let off the hook, right? Very clever.?

At 2.25% this is the seventh time in quick succession that the central bank has increased rates after it first lifted them to 0.25% from 0.1% in December last year.?

Most of us know by now that the reason for the rate hikes is to counter inflation that has soured recently and is predicted to stay high for another year or so.?

So if you?have a mortgage, you might be thinking...

What happens now??

Because the vast majority of mortgages in the UK are fixed, nothing will change immediately.?

It is only when the fixed rate comes to an end and a new rate is required that people will see the difference in payments.

The good news is that fixed means FIXED. So if you're on a fixed deal, your monthly payments will be unaffected until the deal ends.

If however, you are sat on a tracker or variable rate, you will see the difference as rates increase.?

What you should do depends on what sort of mortgage you have now and whether you're close to the end of your initial mortgage term.?

We are noticing that clients are getting in touch with us sooner if they are coming to the?end of a mortgage deal and this is not a bad thing!

Depending on the lender, we can secure rates between 3 and 6 months ahead of your product end date so if you fall in to this category, ping us an email or pick up the phone! We could save you money!

You can of course move your mortgage whilst on a fixed rate and before your deal ends, but there are usually penalties and it's a mathematical exercise to work out if it's worth it.

If you are looking to borrow extra cash or take some equity out, sometimes this is worth considering.?Alternatively we can arrange a homeowner loan, which can then be cleared when your deal does come to an end. If confused, just get in touch.?

With the trend in rising interest rates continuing, the property market is slowly showing signs of calming down from the frenzy of the past couple of years.?

With property values at record highs, a continuous upward curve in pricing isn't sustainable or helpful and the return of more realism is long overdue.?

The revision of how stamp duty is charged is likely to have some impact to counter the interest rate rises, as well as the increase in cost of living. To what extent, we shall see.?

Speaking with some property developers and investors, we are noticing an increase in projects and opportunities coming to them. The predictions are that this will rise over the next year or two.

If you are looking at buying to renovate and sell on or buying to hold, we are piloting some new products that allow developers to get into more projects and therefore make more collective profits.?

Speaking with investors and advisors, UK Property is still seen as the key way to grow your wealth and combat inflation. Remember, buying to let is just one way of doing this. Developing property and adding value is another.?

If anything I've covered this week is something you'd like to discuss further,?reach out to the team here and see how we can help.

All the best,

Steve

Express Mortgages is a trade name of Express Mortgage Services Ltd. Express Mortgage Services Ltd is authorised and regulated by the Financial Conduct Authority. [Reg No: 474427] Company registered in England & Wales no. 05167662

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