How could the base rate rise affect the fixed rate mortgage market?

Monday, December 11th, 2017

As widely mooted, the Bank of England increased the base rate by 0.25% in November; the first increase for 10 years. Whilst the Governor Mark Carney intimated that it will not be the last of the rises, we do not expect the base rate will rise above 1% before the end of 2020.

Uncertainty amongst borrowers looks set to increase demand for mortgage advice

Although some mortgage lenders are likely to apply the rate increase to their product range gradually (as they digest the longer-term forecasts), such changes tend to create uncertainty amongst borrowers regarding the future of mortgage rates. This will no doubt have prompted some with variable or base rate tracker mortgage products to seek out mortgage advice regarding their own arrangements.

Increased interest in fixed rate products expected

We believe that a significant number of mortgage borrowers are on a rate which will or could be influenced by the base rate change (and of course any future changes), so it would be no surprise to see a significant spike in products which are fixed for maybe 5 or 10 years as clients seek to protect against the possibility of further rate rises.

Whilst it remains to be seen whether a surge in borrowers seeking mortgage advice will materialise, (some may choose to absorb this increase and review arrangements later), for those who do want to review their existing arrangements, for many, the first port of call may be their existing mortgage broker or even one picked at random from the local high street.

Specialised products from an experienced mortgage broker

However, as some brokers may be unable to access some of the more specialised products that exist, it may be more appropriate to seek out an experienced mortgage broker that has access to a more comprehensive panel of mortgage lenders.

And that is where our experts on mortgage advice team here at Caboodle Finance of Sutton Coldfield, Birmingham may be able to help.

Whether you are considering moving to a new house or just thinking of taking a first step into the world of property, call us today on 0121 308 9114 or alternatively complete our enquiry form by clicking HERE and we will be delighted to hear from you.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CONSOLIDATING DEBTS MAY INCREASE THE TERM AND TOTAL AMOUNT PAYABLE.

Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. For secured loans a broker fee up to 10% of the loan amount borrowed may be payable on successful completion. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

Caboodle Financial Services Ltd, registered in England at Mere Green House, 46-48 Mere Green Road, Sutton Coldfield, West Midlands B75 5BT (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of PRIMIS Mortgage Network (PRIMIS), a trading name of Advance Mortgage Funding Ltd which is authorised and regulated by the Financial Conduct Authority. PRIMIS is only responsible for the service and quality of advice provided to you in relation to mortgages, protection insurance and general insurance products. Any other product or service offered by Caboodle Financial Services Ltd may not be the responsibility of PRIMIS and may also not be subject to regulation by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let.

© 2020 Caboodle Financial Services Ltd


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