How to Avoid Shock Mortgage Bill Rises This Month
Banks and building societies will soon start paying back more than £100billion they have borrowed, and this could be bad news for cheap mortgage deals.
The Team Funding Scheme (TFS) was launched 18 months ago, but homeowners could soon face a hike in their mortgage bills as a Government scheme comes to an end this month.
Team Funding Scheme
The TFS was designed to make sure that the Bank of England’s interest rate cut of 0.25 per cent in August 2016 was passed onto borrowers in the wake of the EU referendum result. This gave lenders access to cheap money and helped finance cheap mortgage deals – but this could all change this month when the banks and building societies have to start paying the money back.
This has sparked fears that millions of Brits could see rate rises if they’re a first-time buyer or looking to remortgage when their current deal comes to an end. Those on a Standard Variable Rates (SVRs) deals could face a hike even sooner if their lender decides to up their rates.
How to beat a hike in rates
The Bank of England will announce this week if it is to raise base rate again. If it does, then those on Standard Variable Rate Mortgages (SVRs) will likely see their monthly repayments go up as these types of mortgages track it.
If you’re concerned about the impact the TFS might have for the best rates on the market, it might be worth signing up for a fixed-deal instead or enlist the help of a mortgage broker in Essex to provide advice and guidance.
How do you remortgage?
Remortgaging can save you thousands of pounds.
It’s important to start early and don’t leave it until the end of your current mortgage to see what’s available. Most lenders will let you set up your next deal at least three months in advance. You can use a price comparison site to look for deals yourself, or use a mortgage broker to help, who will not only find the best deal for your circumstances but will guide you through the entire process.
The lower you loan-to-value (LTV), the better deals will be available to you; this can be worked out by dividing your outstanding mortgage by your property’s current value.