According to research from the Money Advice Service, three out of four homeowners haven’t considered how an increase in the Bank of England base rate would affect their mortgage repayments.
With the Bank of England estimating that interest rates will rise by 2% to 3% over the next three years it’s important that mortgage holders prepare so the Vernon Building Society have put together some pointers which aim to help:
- Remind yourself of the details of your mortgage – what rate of interest you’re currently paying, whether it’s fixed or variable and when the deal or any associated early repayment charges expire.
- Find out how much an interest rate rise will cost you – the Money Advice Service have a useful mortgage calculator on their website which can help to work these figures out: www.moneyadviceservice.org.uk/en/tools/mortgage-calculator
- Check that your budget can deal with a rate rise – if it cannot then work through your budget to see where you can cut costs or save money. Ensure that you are on a competitive mortgage deal and if you’re not, approach your lender to see what they can offer or consider remortgaging.
Head of Sales and Marketing at the Vernon, Ian Keeling (left), said:
“The Bank of England base rate will rise at some point and it’s important that homeowners are prepared for this and how it might affect them. It’s likely that that any rise will be gradual but planning ahead will ensure that there are no shocks to your budget and that you can cover any increase in mortgage repayments – don’t leave it too late.”
For more information about Vernon Building Society or for a free, no obligation review of your current mortgage arrangements visit any of the Vernon’s local branches to speak to a qualified mortgage adviser.
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