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

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
to provide advice and guidance.

How do you

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.