Safeguard your Mortgage with a quick review.
The cost of living crisis is still in full swing with inflation still high, even with the recent drop announced this week, and the cost of our average household bills far higher than they were 18 months ago. Although this summer will see our energy bills drop at least temporarily, it’s becoming increasingly critical to keep on top of your finances and make sure you’re controlling them rather than them controlling you.
In a recent study* conducted by the FCA (Financial Conduct Authority) it was found that by the end of 2021 there were 2.2m mortgages that were based on some form of variable rate. Out of these 2.2m, approximately half had simply rolled over to the standard variable rate (SVR) set by their individual lenders. Considering that originally these mortgages would have had an average SVR of 4.91%, today this rate is closer to 7.49% meaning these 2.2m households are feeling a serious financial pinch. It’s clear that unless your mortgage is very small, or fully paid off, by simply doing nothing this will be costing you dearly.
With many forecasts predicting the Bank of England Base will increase their base rate even further to 6% before the end of 2023, this could have a seriously detrimental impact on those with a deal ending soon, or anyone who isn’t currently on a fixed rate.
Most mortgages can be reviewed within 6 months of the current deal ending and the sooner you speak to someone the better. Rates are changing fast! A rate secured in February of 4.49% is now typically 6.09%, and on a mortgage of £350,000 this will cost you an extra £300+ each month or almost £8,000 over 2 years!
For so many years we became used to rates of 1-2% and it’s now questionable if we will ever see those rates again. For those who were fortunate to secure these mortgage rates, the likelihood that you will be significantly impacted once these fixes expire is high. Speaking about your mortgage & finances early is a good way to help prepare and plan for the changes you will be faced with, plus you’ll receive independent advice to help you make the right decisions for you and your family.
