Another interest rate rise: how has this affected current mortgage rates? 📈
#CAVENDISHEXPERTS in Lettings, Sales and Property Management in Nottingham | Cavendish Residential | One Fletcher Gate NG1 1QS | 0115 941 0656 | www.cavendishproperty.co.uk
Let's start with the latest interest rate rise...
🔹 The Bank of England (BoE) has recently announced another increase of 0.25% to its Base Rate
🔹 This is its 11th consecutive rise and has pushed interest rates to 4.25%, which is the highest they’ve been for 14 years
🔹 The Bank keeps raising interest rates to tackle high levels of inflation.
🔹 The rate of inflation currently at 10.4%, way above the Bank’s target of 2%
🔹 Chancellor Jeremy Hunt presented his Spring Budget and said that he expected inflation to fall back to 2.9% by the end of the year
🔹 This was received as a positive sign by the markets, and indicated that interest rates had either peaked already, or were about to peak
How might the interest rate rise impact mortgage rates?
🔸 Changes to the Bank’s Base Rate matter because it could impact how much interest you’ll pay on loans, including mortgages
🔸 If you’re on a fixed-rate deal, your monthly payments won’t change. However, if you’re on a variable or tracker mortgage, your payments will almost certainly go up
🔸 Having said that, current mortgage rates already factor in this rate rise, so we won’t necessarily see mortgage rates increase based on the latest rate rise
So, what are the current mortgage interest rates?
How much can you borrow with a mortgage?
🔹 The amount you can borrow with a mortgage is determined by an affordability assessment and your interest rate is determined by the amount of deposit you have, otherwise known as loan-to-value (LTV)
🔹 LTV is expressed as a % and it reflects the size of the mortgage you need as a proportion of the value of the home you want to buy
🔹 The bigger the deposit you have, the lower the LTV, and vice-versa
🔹 A good way to find out how much you could borrow is to use a mortgage calculator.
🔹 And to get a personalised result by applying for a Mortgage in Principle which will take you one step closer to a mortgage offer
All data from Rightmove, for the full article click here.
If you would like to discuss your eligibility for a mortgage, get in touch with our team today.
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#CAVENDISHEXPERTS in Lettings, Sales and Property Management in Nottingham | Cavendish Residential | One Fletcher Gate NG1 1QS | 0115 941 0656 | www.cavendishproperty.co.uk
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