Rate hike adds to mortgage pain for homeowners

Today’s Bank of England rate hike, a 0.75% increase which takes the base rate to 3%, places mounting pressure on homeowners coming to the end of their fixed-term rate, on tracker rates or first-time buyers looking for their first mortgage.

Shopping around and using the latest technologies are paramount to getting the best rates on the market and for people’s personal circumstances, said Andrew Fisher, Chief Commercial Officer at Freedom Finance.

He commented: “The sharp increase in the cost of borrowing over the past year has created an incredibly painful situation for people needing to take out a new mortgage or on tracker rates. Borrowers face repayments increasing by hundreds of pounds every month on top of a mounting cost-of-living crisis and energy shock.

“The difficult situation makes it even more important that homeowners are taking all the steps that are available to them to get the best deal for their circumstances. This means shopping around different lenders rather than simply taking their existing lender’s offer if they are re-mortgaging and comparing different options on the market to see if they could access a better rate or product for their individual circumstances.

“There has been significant innovation within the mortgage industry recently with more longer-term deals coming to market as well as increasing personalisation through offset mortgages, for example.

“Digital marketplaces are a great place to start as they can show customers just the deals they’re eligible for and give them access to regulated, impartial advice that considers their overall financial situation. These technologies offer homeowners the best opportunity of securing a deal that will benefit them in the long-term while supporting them through the cost-of-living crisis.”