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Advice for mortgagees following the base rate increase

The Bank of England’s decision to raise the base rate to 5% (the highest rate in 15 years) is alarming news for mortgaged homeowners or those looking to get on the property ladder. However, James Miles, Director at The Mortgage Quarter, an Exeter-based mortgage broker, urges homeowners not to panic.

“Mortgage rates have steadily risen as the Bank of England has progressively increased the base rate. And this half a percentage increase will undoubtedly affect rates further. Anyone on a tracker or variable rate mortgage will see an immediate increase to their regular payments. However, there are options available to mortgagees to help reduce their monthly mortgage payments, and it’s worth exploring these with a professional adviser.” 

Potential options to help lower monthly mortgage payments include:

  • Extending the mortgage term either on a temporary or permanent basis
  • Consolidating debt
  • Switching to an interest-only mortgage

The possibilities will depend on a borrower’s individual circumstances, so they aren’t suitable for everyone but could offer a financial lifeline. 

James adds, “The best advice I can give to anyone concerned about their mortgage situation is to seek advice from a professional mortgage adviser. And to do that sooner rather than later. 

“If your fixed-term mortgage is up for renewal within the next six months, start looking at your options now. You can lock in a new rate up to six months before your current deal ends but still have the flexibility to switch to a different product if rates come down before then.”

Anyone concerned about their mortgage or wishing to review their situation can contact James on 01392 660219 or visit www.themortgagequarter.co.uk.