Mortgage pain as thousands are thrown into higher rates – what to do next | Personal finance | Finance
Struggling with rising inflation, the Bank of England has decreed a series of interest rate hikes that show no signs of slowing down. However, the ripple effect is for mortgages, which are also seeing rate hikes.
For those coming to the end of a two or five year fixed rate agreement, this could come as a huge shock as they are forced to reckon with higher expenses.
Express.co.uk spoke exclusively to Nick Chadbourne, CEO of conveyancing provider LMS, who shed light on what the current crisis means for mortgage holders.
Mr Chadbourne described a toxic mix of rising prices, rising interest rates and stagnating property prices.
This will likely have a huge impact on millions of homeowners, even those who may see the end of their mortgage in sight.
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“Product transfers remain popular, but shopping around and looking for the best deal for you is definitely not a bad thing, especially with the improvements made to the remortgage space over the past 12 months.
” Do not hesitate ! Instead, act early and give yourself more time to talk to a broker who can assess the overall market and find the best deal.
“There are definitely options out there – lenders are offering more five- or even 10-year fixed rates, and they’re growing in popularity.”
Phil Jeynes, director of corporate strategy at Reassured, said Express.co.uk families should consider whether they are protected.
He added: “As people see their spending increase, there will clearly be a need to cut costs and look at the value of every direct debit.
“Life insurance can seem like a luxury compared to monthly mortgage payments, food and heating.
“But it is essential to remember that once cancelled, it can only be reinstated after a full underwriting process. This means that if you die or become seriously ill in the meantime, your family’s financial situation could worsen.
However, it’s something people should always consult with a financial adviser before making a big decision about their finances – and it’s not the only thing they can do to protect their future.
As Mr. Chadbourne pointed out, there are still competitive rates available in the market. As a result, shopping will be vital for Britons to allay some of their fears and reduce stress on their monthly outgoings.
Those concerned about not being able to pay off their mortgage should contact their lender first.
Some may be able to increase their income, for example, if they are entitled to benefits that they have not yet claimed.
Services such as Citizens Advice and MoneyHelper are also available to help people manage their finances.