Martin Lewis warns homeowners that mortgage rates are set to rise exponentially in 2022
The Money Saving Expert founder Martin Lewis has issued a stark warning to homeowners after another rise in the Bank of England base rate in March and predicted further rate rises this year and into 2023. Along with the rises in energy and food prices mortgage rates could skyrocket meaning many homeowners could really feel the squeeze financially. Lewis is urging everyone to check if there is a better deal out there for you if you’re not already on a competitive rate. The financial guru has warned that “things are likely to get worse” due to the Bank of England increasing the base rate from 0.5% to 0.75% in March and analysts Capital Economics expect rates to increase to 1.25% by the end of the year and to an enormous 2% in 2023. Lewis comments: “While mortgage rates have increased, in a longer historical context, they're still cheap. This is especially true of the cheapest longer fixes which are currently only a touch more expensive than shorter ones and give certainty for much longer. “That means everyone who has a mortgage who isn't already locked into a decent rate for the foreseeable future should be checking if there's a better deal out there. Even if your deal ends in six months, there are options to lock in a rate." Lewis added that those who like to be able to budget every month and know exactly what their outgoings will be may feel more secure on a fixed rate deal. Most banks allow you to set up a new mortgage up to six months before your current deal ends so it’s worthwhile looking at the deals available to you in advance. Lewis advises that everyone check their current deal including the rate, monthly repayment, how long is left on the term and whether you will be penalised for switching before your current deal comes to an end. He then suggests that you check rates with your existing lender as doing a ‘product transfer’ will avoid having to undergo the usual affordability checks carried out on new customers. This can also mean you avoid additional fees and extra paperwork.
Once you know the best rates offered by your current lender, it’s worth checking what else is out there with the help of a mortgage broker. Lewis also suggests that in order to make your application go through as successfully as possible try to cut down on expenses in the months before applying for a mortgage. You can check your credit file for free to ensure there are no errors, and if possible, pay off any outstanding debts. Lastly, Lewis advises seeking a mortgage broker who can compare the whole market for you. They will also have access to exclusive deals that you might not be able to find yourself. A good broker will be able to negotiate the best deal on your behalf and appeal your case if a lender initially rejects you. This is particularly important if you have special circumstances like bad credit or want to buy a non-standard home.
Lastly, Lewis advises seeking a mortgage broker who can compare the whole market for you. They will also have access to exclusive deals that you might not be able to find yourself. A good broker will be able to negotiate the best deal on your behalf and appeal your case if a lender initially rejects you. This is particularly important if you have special circumstances like bad credit or want to buy a non-standard home.
