Today saw the Monetary Policy Committee announce the sixth consecutive increase in the Bank of England Base Rate with members now voting for a rise at each of the six-weekly meetings since December 2021.
With talk of further increases expected in the coming months, you could be forgiven for wondering if now is still a good time to take out a new mortgage.
Looking back through the history books, interest rates are now at their highest since December 2008. And while all the headlines in the coming days will be about ‘hikes’ and 'rises', it's worth noting that the average BoE rate since 1971 is 7.17% with a record high of 17% reached in November 1978.
So with that in mind, what if you are looking at moving to a bigger property?
If you’re thinking of moving home, consider why. Do you really want to delay finding a more suitable property, or your forever home, because of the interest rate? In the current climate, any delays are only likely to result in your mortgage payments increasing.
First Time Buyer?
A quick look at the news and it’s easy to see why it may feel a little more daunting if you’re contemplating taking your first step onto the property ladder than it did a few months ago. However, it’s not just interest rates which are on the rise. A knock-on effect will likely see rent payments increasing, so if you are concerned about affordability there are still benefits to buying.
When purchasing a property, be it to live in or for investment purposes, you really need to take a long-term view.
What Does This Mean For Buy To Let Mortgages?
In the past, a buy to let property was seen as an easy way to make money. However recent legislation has seen higher costs and more complex legal requirements introduced. And an increase in the cost of borrowing will hardly make things any simpler. However, when executed effectively, buy to let investments still offer the potential for rewarding long-term returns
Speak to a Skybound Wealth Mortgage Advisor Today
Our advisors will provide Illustrations showing how future interest rate changes could affect your mortgage repayments, and if uncertainty about future rates is your main concern, there are products available which provide a fixed interest rate for 10 years, ensuring protection against any rate rises during that period.
It may also surprise you that, at the time of writing (4 August 2022), we have lenders on our panel who are still offering mortgages with rates below 2.50% (available for both residential and buy-to-let properties) and expat borrowing at under 4%.