I am currently on a variable mortgage rate. I have read that rates may increase soon. What are my options?
There are strong hints that The Bank of England may be about to increase base rate for the first time in ten years, due to higher than anticipated inflation and economic growth.
Some UK lenders have already priced a rise in to their mortgage products, anticipating the move in base rate and reflecting the marginal increase in Swap rates – the mechanism by which banks borrow money from the money markets to lend out to you and me.
Here in Jersey, as at the date of replying to this question, thankfully we have not seen any product rate increases.
However, it is our view that mortgage rate increases are imminent and inevitable.
If you are at all concerned about rising mortgage rates and thus rising monthly mortgage repayments, you should seriously consider opting for a fixed rate product. This applies both to new mortgages and for existing borrowers, who may wish to consider switching to a fixed rate, or perhaps re-mortgaging, if the terms are better with another lender. There are a range of fixed rate products available, from as low as 1.14%.
As ever, the strong recommendation is to seek professional advice from an independent local mortgage broker who has access to the whole range of mortgage products.
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