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Change is afootMonday 12th December 2016
We’ve been enjoying low mortgage rates for quite a while and this year alone has seen the launch of record-breaking deals costing less than one per cent from HSBC, and 10-year fixed rate products at below three per cent.
But the cost of your mortgage could be set to rise very soon. In recent weeks, we have seen a number of banks and building societies increase interest rates on some of their mortgage deals. Both Skipton Building Society and Virgin Money have re-launched some products at a higher rate, with Virgin Money increasing the cost of some 95 per cent Loan to Value (LTV) products by up to 10 per cent.
So why is this happening? The cost of the US government’s borrowing has risen since the election and the expectation is that inflation will return. In the UK the cost of government borrowing has also risen, owing in part to the EU referendum result and the fall in the value of sterling.
UK interest rates are strongly influenced by movements in the global financial markets, which have experienced increased volatility since the US election result. The cost of US mortgages has already risen and many commentators believe that UK interest rates will not be far behind.
So with the era of rock bottom interest rates now potentially coming to an end, it could be time to review your mortgage – particularly if you are paying interest at your provider’s Standard Variable Rate (SVR) or if your current mortgage deal is coming to an end.
Call us for impartial mortgage advice.
A version of this article originally appeared in the Isle of Wight County Press, Friday 9th December 2016