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작성자 Phoebe 작성일24-05-16 22:17 조회24회 댓글0건관련링크
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이름 : Phoebe
이메일 : phoebemesser@yandex.ru 연락처 : 예식일 : Prepare yourself for mortgage shock, but you can avoid steepest hikes 문의내용: Hit hard: Homeowners face rate rises costing them hundreds of pounds
Mortgage rates are surging at a record pace, leaving homeowners at risk of yearly payments hundreds of pounds higher than in recent years.
The average two-year fixed rate deal is now at its highest in nine years, and 1.4 percentage points higher than in December last year, according to rate scrutineer Moneyfacts.
But there are steps borrowers can take to avoid the steepest hikes.
What is going on with interest rates?
The Bank of England has been raising interest rates in an attempt to curb soaring inflation.
Its Base Rate has risen from 0.1 per cent in November to 1.25 per cent today, and is likely to increase again this week. Lenders pass on these rises to customers.
Take, for example, someone with a £200,000 two-year fixed-rate mortgage that they took out in the summer of 2020.
If they locked into the best deal available at the time, they would be paying interest of 1.09 per cent. But when they come to remortgage, the best equivalent rate will have jumped to 2.79 per cent, pushing up their repayment costs by £1,152 a year.
This is Money's mortgage comparison calculator powered by broker L&C can help you work out how much your monthly payments would rise by and show the loans that you could potentially apply for, based on your home's value and mortgage size.
What you should do - fix your rate now
If you have a variable rate mortgage, 신용불량자인터넷가입 fix now to protect yourself from future rate increases.
Someone with a £200,000 mortgage where the interest tracks the Base Rate would already have seen repayments rise by over £100 a month since rates started rising late last year.
If you are already on a fixed deal, plan ahead so that you are ready to lock into the best rate when it ends.
Laura Suter, head of personal finance at investment platform AJ Bell, says: 'Most borrowers are on a fixed-rate deal, so have been protected so far from rate rises.
'However, the big shock will come when their deal is up and they remortgage - then they will face the full effect of all the recent rate hikes in one go.'
Start researching remortgage deals a few months before your current one ends. Most mortgage offers are valid for six months so if you are due to remortgage before January 2023 you may be able to lock into a new deal at today's rates.
If rates are lower when it is time to remortgage, you can ditch the rate you booked in advance and go for a cheaper deal.
You can also check your credit score to ensure you will eligible for the best possible mortgage rate.
Do it early and you have time to improve it if necessary, for example by adding yourself to the electoral roll or challenging any mistakes.
Consider a green mortgage
Some lenders offer better rates if your home is energy efficient. Virgin Money, NatWest and Barclays offer a competitive rate if your home has a stellar energy performance rating certificate - A or B.
Green mortgages are increasingly popular - internet searches for these products have quadrupled in a year, according to mortgage technology firm Twenty7Tec.
Although rates on green mortgages tend to be lower than average, they are not necessarily the cheapest available, so it still pays to compare prices.
For example, Virgin offers a five-year fixed-rate greener mortgage at 3.49 per cent with £300 cashback. The best five-year fix across the market is 2.78 per cent from Ulster Bank, part of Royal Bank of Scotland.
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HOW THIS IS MONEY CAN HELP
Looking for a cheaper mortgage? Check the best rates for you and get fee-free advice
Overpay - then get a cheaper loan
Reducing your mortgage debt by overpaying makes great financial sense.
David Hollingworth, associate director at L&C Mortgages, says: 'Borrowers who are still enjoying a low mortgage interest rate can overpay now to help to erode their balance more quickly and leave them with a smaller mortgage when their current deal ends.'
Overpaying can help you to reduce your loan-to-value ratio - the loan as a percentage of the home's value - and make available loans at lower rates.
For example, take someone with a home worth £283,000. If they had a loan-to-value above 65 per cent, they could get a five-year fixed-rate of 3.22 per cent from NatWest with monthly payments of £925.
But if they had overpaid so that the loan-to-value was 60 per cent, they could access a lower five-year fixed-rate of 3.16 per cent from HSBC, with repayments of £819 a month. Over the full term, they would save £31,699 in interest payments.
이메일 : phoebemesser@yandex.ru 연락처 : 예식일 : Prepare yourself for mortgage shock, but you can avoid steepest hikes 문의내용: Hit hard: Homeowners face rate rises costing them hundreds of pounds
Mortgage rates are surging at a record pace, leaving homeowners at risk of yearly payments hundreds of pounds higher than in recent years.
The average two-year fixed rate deal is now at its highest in nine years, and 1.4 percentage points higher than in December last year, according to rate scrutineer Moneyfacts.
But there are steps borrowers can take to avoid the steepest hikes.
What is going on with interest rates?
The Bank of England has been raising interest rates in an attempt to curb soaring inflation.
Its Base Rate has risen from 0.1 per cent in November to 1.25 per cent today, and is likely to increase again this week. Lenders pass on these rises to customers.
Take, for example, someone with a £200,000 two-year fixed-rate mortgage that they took out in the summer of 2020.
If they locked into the best deal available at the time, they would be paying interest of 1.09 per cent. But when they come to remortgage, the best equivalent rate will have jumped to 2.79 per cent, pushing up their repayment costs by £1,152 a year.
This is Money's mortgage comparison calculator powered by broker L&C can help you work out how much your monthly payments would rise by and show the loans that you could potentially apply for, based on your home's value and mortgage size.
What you should do - fix your rate now
If you have a variable rate mortgage, 신용불량자인터넷가입 fix now to protect yourself from future rate increases.
Someone with a £200,000 mortgage where the interest tracks the Base Rate would already have seen repayments rise by over £100 a month since rates started rising late last year.
If you are already on a fixed deal, plan ahead so that you are ready to lock into the best rate when it ends.
Laura Suter, head of personal finance at investment platform AJ Bell, says: 'Most borrowers are on a fixed-rate deal, so have been protected so far from rate rises.
'However, the big shock will come when their deal is up and they remortgage - then they will face the full effect of all the recent rate hikes in one go.'
Start researching remortgage deals a few months before your current one ends. Most mortgage offers are valid for six months so if you are due to remortgage before January 2023 you may be able to lock into a new deal at today's rates.
If rates are lower when it is time to remortgage, you can ditch the rate you booked in advance and go for a cheaper deal.
You can also check your credit score to ensure you will eligible for the best possible mortgage rate.
Do it early and you have time to improve it if necessary, for example by adding yourself to the electoral roll or challenging any mistakes.
Consider a green mortgage
Some lenders offer better rates if your home is energy efficient. Virgin Money, NatWest and Barclays offer a competitive rate if your home has a stellar energy performance rating certificate - A or B.
Green mortgages are increasingly popular - internet searches for these products have quadrupled in a year, according to mortgage technology firm Twenty7Tec.
Although rates on green mortgages tend to be lower than average, they are not necessarily the cheapest available, so it still pays to compare prices.
For example, Virgin offers a five-year fixed-rate greener mortgage at 3.49 per cent with £300 cashback. The best five-year fix across the market is 2.78 per cent from Ulster Bank, part of Royal Bank of Scotland.
RELATED ARTICLES
Previous
1
Next
Property transactions fell 55% in June compared to 2021... More than a THIRD of house purchases fell through in the... TSB faces £800m mortgage prisoner lawsuit from former... House prices up £32k in a year after seven months of...
Share this article
Share
HOW THIS IS MONEY CAN HELP
Looking for a cheaper mortgage? Check the best rates for you and get fee-free advice
Overpay - then get a cheaper loan
Reducing your mortgage debt by overpaying makes great financial sense.
David Hollingworth, associate director at L&C Mortgages, says: 'Borrowers who are still enjoying a low mortgage interest rate can overpay now to help to erode their balance more quickly and leave them with a smaller mortgage when their current deal ends.'
Overpaying can help you to reduce your loan-to-value ratio - the loan as a percentage of the home's value - and make available loans at lower rates.
For example, take someone with a home worth £283,000. If they had a loan-to-value above 65 per cent, they could get a five-year fixed-rate of 3.22 per cent from NatWest with monthly payments of £925.
But if they had overpaid so that the loan-to-value was 60 per cent, they could access a lower five-year fixed-rate of 3.16 per cent from HSBC, with repayments of £819 a month. Over the full term, they would save £31,699 in interest payments.
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