Snap up a mortgage deal now before rates rise further

Filed Under Finance

It was only a few days ago that I predicted that mortgage rates will rise even though the Bank of England base rate has not changed for a few months. Well it seems that this is starting to happen now.

According to the Telegraph today, mortgage rates have hit a 9 year high as lenders such as the Abbey have just increased rates for their standard tracker mortgages.

So as we all heaved a sigh of relief about the base rates last week, there is still gloom for those with mortgages, particularly if you are coming to the end of your fixed rate term. Buy to let investors could be badly hit too.

Its becoming an interesting, and painful, situation whereby mortgage costs are rising even though the Bank of England base rate isn’t. Deciding what is best for your mortgage seems more difficult because although it is unlikely that base rates will rise in the foreseeable future, we now have to consider how long the credit crunch will last.

So what can you do?

Many brokers are recommending that you arrange a new mortgage as soon as possible, if you are coming to the end of your fixed rate term. It generally takes a couple of months to arrange a mortgage so if your term is ending before Christmas then you should act now to secure a good tracker or discounted rate deal before mortgage rates climb higher.

This means that if mortgage rates start to fall early next year as the financial crisis (hopefully) eases, then at least you will benefit from lower mortgage payments.