A cost-of-living crisis has emerged in recent months and has been exacerbated further by pressure on energy and commodity prices following Russia’s invasion of Ukraine. The latest Office for Budget Responsibility (OBR) figures suggest inflation will average 7.4% across the rest of 2022, peaking at 8.7% during the final quarter. 1
Families have already been expecting a significant hike on their annual energy bills. As every penny counts, it’s important to consider all your options for budgeting and streamlining your outgoings; this could be the time to explore whether more favourable rates are available on your mortgage.
Paying over the odds?
If your mortgage deal has expired, it’s likely you are on your lender’s Standard Variable Rate (SVR) and will have been hit already by recent increases to the Bank of England Base Rate. SVRs can be higher than those available on fixed deals, especially when interest rates are on an upward trajectory. SVRs fluctuate as interest rates rise and fall. Switching to a fixed rate mortgage deal instead could both save you money and make budgeting easier, as you’ll know exactly what is going out each month.
Take time to review and get advice
You can switch your mortgage at any time you like but you could face early repayment charges (ERCs) in doing so. Even if your current mortgage deal hasn’t quite expired, however, you could start the remortgaging process up to six months in advance, as many lenders allow you to lock into a product before the end of your current deal. Getting ahead in the process can give you the time you need to assess your available options. That’s where we can help – by searching the market for the most suitable mortgage finance for your circumstances.
1 OBR, 2022
🚨Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
🚨 Data accurate as of the date of publication – 06.06.2022.
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q2 2022
