*This article was published in August 2023. Some information may no longer be current.
Despite the BoE’s best efforts, inflation remains sticky, which essentially means that it doesn’t seem to be reacting quickly to countermeasures. To combat this, we’re likely to see further base rate increases, which means we’re just as likely to see increases in mortgage interest rates.
Financial experts anticipate that interest rates will continue to rise throughout 20231, with rate cuts not expected until late 2024. Some even predict that the base rate could peak at 6.25% by the end of the year. This approach reflects the BoE’s urgency in tackling high inflation, even though it may have a detrimental effect on mortgage borrowers and cause financial instability in many households.
Although the consumer price index (CPI) remained unchanged from the previous month (which is the estimated increase of goods like food and energy), core CPI, which excludes these things, rose to 7.1% year-on-year, which is the highest level it’s been at since 1992.
To learn more about what the consumer price index is and how it affects interest rates, check out our article for more information.
What you can do right now
Here are five steps you can take now if you’re concerned about your mortgage and rising interest rates:
- Check the terms of your current mortgage - when does your mortgage expire and what are the charges for leaving early?
- Stress test your own finances and ensure you can afford a substantial increase, should it come to that
- Consult with an expert mortgage adviser who can advise you on the most suitable available mortgage products
- Review your outgoings and see where you can make some savings
Expert mortgage advice
Get in touch today to make a no-obligation appointment with one of our mortgage advisers, who can discuss your options and make sure you’re still on the right deal for your circumstances.
Important information
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
Your property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.