Interest Rates Could Hit 6% In 2023. Time To Remortgage?

It was predicted a few months ago that interest rates will increase to 1.5% next year. In August, money markets were betting that the rates would actually hit 2.75% in 2023, but after the mini-budget last week, the expected peak is now 6%.

Whilst a 6% interest rate is historically quite low, it was only 0.1% less than a year ago. The level of increase may cause a shock to those who are on, or moving onto, variable rate mortgages.

For example, if you have borrowed £250,000 at 2% interest and rates move to 6%, your payments could increase by over £800 PER MONTH.

What Are Your Options?

Unfortunately, a lot of lenders have taken many of their products off the market leaving you with less choice. The good news is that this is a reaction to the recently made predictions and they will likely come back, but with a higher interest rate than was offered just a week or two ago.

My advice would be to take a look at your mortgage statements to find out what your current rate is, when the fixed term ends, what rate you will move to at the end of the term and what you will have to pay if you want to end the mortgage early then speak to a broker to see if you can get a better deal.

Even if you have to pay to exit your current deal early, it might save you money if you can secure a lower interest rate in the long-term.

I can put you in touch with a great mortgage broker if you’d like to discuss further.It was predicted a few months ago that interest rates will increase to 1.5% next year. In August, money markets were betting that the rates would actually hit 2.75% in 2023, but after the mini-budget last week, the expected peak is now 6%.

Whilst a 6% interest rate is historically quite low, it was only 0.1% less than a year ago. The level of increase may cause a shock to those who are on, or moving onto, variable rate mortgages.

For example, if you have borrowed £250,000 at 2% interest and rates move to 6%, your payments could increase by over £800 PER MONTH.

What Are Your Options?

Unfortunately, a lot of lenders have taken many of their products off the market leaving you with less choice. The good news is that this is a reaction to the recently made predictions and they will likely come back, but with a higher interest rate than was offered just a week or two ago.

My advice would be to take a look at your mortgage statements to find out what your current rate is, when the fixed term ends, what rate you will move to at the end of the term and what you will have to pay if you want to end the mortgage early then speak to a broker to see if you can get a better deal.

Even if you have to pay to exit your current deal early, it might save you money if you can secure a lower interest rate in the long-term.

I can put you in touch with a great mortgage broker if you’d like to discuss further.