Mortgage rates
The Bank of England Base Rate is currently the lowest it has ever been but the rate is likely to increase in future. This is a scary thought for some, and it’s worth bearing this in mind when deciding on your affordability. Nobody knows when (or if) the interest rates will increase, but while the government inflation figures come in higher than predicted, it is worth using caution when calculating your maximum budget.
Use the mortgage calculator to see what would happen to your mortgage payments if the interest rate was increased by a few percent. The figures can be quite scary! Protect yourself and your family as much as possible by having the knowledge of what MIGHT happen BEFORE it happens.
If you are worried about inflation, and the possible effect on your repayments – then shop around for a longer term fixed rate product – that way you’ll have the security of knowing exactly what your payments will be for a fixed period of time. You will pay a premium interest rate for this – as the banks often charge an extra percent (or even more) for longer term deals.
Some people feel that the security provided by a longer term fixed rate offers more stability and peace of mind (i.e. you know for sure what your monthly repayments will be for the fixed rate period). Other people might feel that the savings provided by the lowest possible rate outweigh the risks of being on a rate that isn’t fixed (i.e. your lender might increase your interest rate at any time, or they might not).
The information on this site is intended to be generic information and is not advice. If you need advice in relation to your mortgage needs, you should consult a professional mortgage advisor.