For anyone with a mortgage, it won’t have escaped notice that the UK interest rates have been increasing over time. A combination of Brexit, COVID-19 and the conflict in the Ukraine have contributed to the surge in rates for first time-homeowners.
After the mini-budget announcement, fixed rates increased by 1% overnight which caused concerns for UK mortgage holders and for those looking to get on the property ladder.
Last year, the 5-year fixed rate pricing was under 1% however today these rates have soared to the highest inflation the UK has faced in years.
Previously the cost of a £500,000 mortgage over 25 years would be £2,056 on a repayment basis or £725 on interest only. However the rates now start from 4.40%, inevitably increasing the cost of the same mortgage (to £2,752 on a repayment basis or £1,833 on interest only).
For those who took out a mortgage in recent years, they will be subject to an increase on their overall monthly costs, which is an unwelcomed addition to the previously increased cost of living. It’s estimated that almost 2 million fixed rate mortgages are due to mature in the next 12 months.
Note: Do not, whatever you do, leave this until your fixed rate is about to end – you MUST give some serious thought long before that point.
If you have a mortgage maturing within the next 12 months, please get in touch with us in good time so that we can help you secure the best deal.
At Lubbock Fine Wealth Management, we can support with reviewing your mortgage. For assistance, please get in touch with Director, Andrew Tricker (email@example.com), or Chartered Financial Planner, Görkem Barron (firstname.lastname@example.org) .