In the UK, interest rates are currently at an all time low. In March 2020, the global pandemic hugely affected economic activity which resulted in a huge cut in interest rates. The Bank of England’s base rate is currently at an all-time low of 0.1%. However, this could all change. Later this week, the Bank's rate-setting Monetary Policy Committee is due to meet and will announce their decision.
Wondering how rising interest rates could affect your mortgage? As lenders often seek to increase their interest rates in line with the Bank’s decision, many people with a mortgage will end up facing higher repayments. Here at Planet Mortgages, we make it our mission to help you through the entire mortgage journey. So, we’ve compiled some useful information on the potential rising interest rates below…
I have a fixed rate mortgage, will rising interest rates affect me?
If you have a fixed rate mortgage deal, you’ll only see a change in your monthly repayments when your current term ends.
Will tracker mortgages be impacted by increasing interest rates?
A tracker mortgage is a type of variable rate mortgage. It’s designed to follow the Bank of England base rate during a specified period, so your repayments can vary. If the Bank of England decides to up their interest rates, then you’ll most likely find that your monthly repayments will rise.
Standard Variable Rate (SVR) mortgages and the potential increasing interest rates
If you have recently come to the end of your fixed rate mortgage and have not switched to another fixed product, it’s likely that you’ll be on a standard variable rate. For some, this type of mortgage is more appealing as it offers an increased amount of flexibility. With this type of mortgage product, the rate of interest can fluctuate at any time. So, if the Bank of England base rate is altered, then it’s likely that this will affect your monthly repayments.
If you have further questions about how you could be impacted by rising interest rates, then please get in touch
with our friendly team at Planet Mortgages. Whether you’re looking to land your dream home or you currently have a mortgage and you’re worried about how this news could affect you, we can help. We make it our mission to make the mortgage process as stress-free and straightforward as possible.