For as long as I can remember I have been saying to my clients there has been a whole generation of mortgage borrowers that don’t know what a “normal” interest rate is.
A survey carried out by Which? has shown that nearly half of all mortgage borrowers have never seen a rate rise.
No-one ever imagined 10 years ago that in 2017 we would still have record low interest rates and the Bank of England base rate would be at 0.25%. Many times I have been convinced that the base rate was going to rise however every time something prevented it from going up.
It is now firmly expected that on Thursday 2nd November the Bank of England will rise the base rate to 0.5%. Which? suggest that this will affect around 31% of mortgage borrowers, of which 1 in 20 could struggle to make ends meet.
I have been telling clients for years to take advantage of the rates being low while you can, make over payments as often as possible and bring down your mortgage balance so when mortgage rates return to a normal level, which they will, you will be prepared for it.
The real concern for millions of households will be if inflation continues to rise and rates return to where they were historically they could really see their finances stretched over the coming years.
If you would like to discuss this, or any anything else, contact our advisers today on 01202 937444 or visit our other websites to speak to a mortgage broker in Reading or a mortgage broker in Bournemouth