Typical mortgage repayments have increased by over £100 per month since the Bank of England began hiking interest rates, new analysis by adviser L&C has revealed.
The research showed mortgage rates had more than doubled since October 2021, when they hit an historic low and the cheapest two-year fixed rate was coming in at 0.89%.
Today, following four interest rate rises, the lowest two-year fixed deal is now coming in above 2% according to the mortgage adviser’s Remortgage Tracker.
As such it is advising borrowers to review their deals now to protect against further rate rises.
David Hollingworth, associate director at L&C Mortgages said: “The market is moving at breakneck speed as lenders try to manage their product ranges and lending volume, often resulting in products lasting days rather than weeks.
“That presents a real challenge for borrowers trying to keep on top of market movements but with continuing increases in mortgage rates it’s all the more important for borrowers to keep a tight rein on their mortgage.
“There are still impressive savings to be made over lender variable rates and those could grow as base rate looks set to continue on an upward trajectory.
“Cutting the mortgage rate could help deal with higher living costs and build in security against further interest rate rises. However, increasing outgoings are also likely to feed into lender affordability criteria, so borrowers should seek help in pinpointing the best deal.”
L&C based its calculations on a typical £150,000 repayment mortgage – this was now more than £100 higher than at the low, pushing annual mortgage payments up by more than £1,200 per year.
What’s the average variable mortgage rate?
It said the recent Base Rate rises had been feeding through to lender Standard Variable Rates too. The average customer paying this rate, which is the deal onto which they default if they don’t remortgage at the end of their previous deal, was 4.34%
What should I do if I want to remortgage?
It’s vital you shop around at the moment as, although rates have increased, there are still a wide variety of deals onto which you can remortgage. By doing your research, you can find the best rate and deal to suit your needs and financial circumstances.
L&C said in this climate it can pay to shop around in good time to secure a rate before a current deal comes to an end.
Lender offers can be valid for up to six months which provides an opportunity to lock in for those wanting to bag a rate sooner rather than later.
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Need help to find a mortgage? What Mortgage has teamed up with L&C to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
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