Advice for borrowers as mortgage rates rise in June 2023

Homeward Legal offers some pointers and advice for borrowers as the mortgage rates rise again in June 2023.

Many homeowners will be glued to the news at the moment due to the mortgage rate changes. As The Guardian reports, the average mortgage rate for a two-year fixed deal is edging closer to 6%, with The Bank of England’s former governor Mark Carney predicting interest rates to remain high “for the foreseeable future”.

This is especially shocking for those who took out a mortgage around the time of the pandemic, when interest rates were low.

Your mortgage is most likely the highest outgoing spend you have every month, so it’s important you understand what’s happening in the wider financial world and when you should make a switch.

What does all this mean for your mortgage rates?

This change is likely to rise the monthly mortgage payments for every homeowner. The BBC reports that the Bank’s interest rate has gone up from 4.5% to 5% – it’s highest level in 15 years and a bigger rise than most forecasters expected.

Is your fixed term mortgage deal coming to an end?

The first thing to do is to check your paperwork or online account with your lender, and double check with them what changes are coming up for your mortgage payments. While the fixed rate protects homeowners to some extent, these deals are short-term and you will still see a hike once the fixed mortgage rate ends.

How much more will you pay once you leave your fixed term mortgage?

This is hard to say, as the news around mortgage rates is changing daily. However, the mortgage rate calculator on the BBC gives a helpful of the price rises you’re likely to encounter.

Are you looking to make a decision about your mortgage?

There are some changes you can make to mitigate the hike you’ll see in your monthly outgoings.

Many people may consider lowering their monthly payments by extending the lifetime of their mortgage. This is a type of remortgaging, and if you stay with your current lender, then you do not always need a solicitor to be involved.

This also applies if you simply challenge your current lender to give you a better deal – they won’t want to lose you as a customer if they don’t have to!

You may also choose to look around for a new deal from a different lender. If you do decide to switch mortgage lenders, then you’ll need to instruct a solicitor to help you with this process.

This is where Homeward Legal comes in – and here’s where you can get a quote for a solicitor to help with your remortgage.