With the Bank Of England split regarding interest rate rises it is only a matter of time before we see the rate rise but what does it mean for people who already have a mortgage and for the first time buyers looking to get on the property ladder in the UK.
Firstly for anyone with a current mortgage who is on a fixed rate any rise by the BOE will not affect you unless your deal is coming to an end very soon and if you are concerned about it now is the time to check to see if you have an early redemption penalty and if so when will it expire.
For people on a tight budget or people just wanting to ensure there monthly mortgage payments remain the same then fixed rate mortgages is best for you.
For people who are already on the Standard Variable Rate or who have a tracker mortgage then any increase by the BOE will almost certainly see your monthly mortgage payments rise with immediate effect. If this applies to you and you want some certainty as to your monthly mortgage payments moving forward then speak with a mortgage advisor now who will help you find the best mortgage deal to sit your needs.
For first time buyers especially people looking for a 90% mortgage then this will have no impact other than your monthly mortgage payments will be greater than they would have been at the present moment.
It will not impact on your chances of getting a mortgage other than affordability which has just been tightened up by the industry so because the payments will be higher may squeeze your budget harder than might have been if the rates did not rise.
There is no guarantee that the BOE will raise the rate anytime soon as the previous vote was 7-2 in favour of holding the rate and with the economy growing in the UK but not in other parts of the EU a the same rate I think it is unlikely we will see an interest rate rise before 2015.
If you feel concerned at all about the speculation surrounding interest rates then it is best you speak with a mortgage broker straight away as leaving it too late might see a rate change coming into place and you paying more for your mortgage than you needed to.
For first time buyers any interest rate rise will have no effect on the schemes available to you via the government to help first time buyers get on the property ladder so you can continue to look in the knowledge these schemes will still be available to you.
In some areas the funds available for first time buyer schemes have ran out so if you are looking check with a mortgage broker to ensure the scheme still has funds available before you commit to buying you first home. https://90mortgagesuk.co.uk