Jeni Browne, head of residential and buy to let lending looks at how you can protect yourself in this period of economic uncertainty.
Whether you voted to leave or remain, there is no escaping the fact that the UK now faces a period of uncertainty – interest rates are going to be largely affected by this.
There has already been suggestion of Bank Rate being reduced by 25 basis points or even reduced to zero, with a view to bolstering the economy and keeping things on an even keel.
So, it would be understandable for one to assume that this would also mean a reduction in mortgage rate pricing. Unfortunately, this is not the case.
Mortgage pricing is largely dictated by the cost of borrowing on the money markets.
The period of uncertainty into which we are now entering plus the UK’s credit outlook being downgraded to ‘negative’ will mean that the cost of funds on the market will increase, which means mortgage rates going up.
There is one exception… If you are already on a Bank Rate tracker, you will directly benefit from any future Bank Rate reductions (as well as suffer any increases).
How can you protect yourself from any rate rises in this period of uncertainty?
We believe that five year fixed rates are a very viable option, protecting yourself from market fluctuations in the near future.
For this reason alone my handpicked top 10 rates this week are all five year fixed products.
We have already seen some lenders withdraw their five year fixed rates, replacing them with higher priced deals, so now really is the time to review your arrangements.
Call your consultant, or 0345 345 6788 today and let us help you today.