Analysts from Pantheon Macroeconomics research group have completed recent analysis on the mortgage market, and the impact of the recent Bank of England base rate increases on the cost of new Mortgage Deals.
Their analysis shows that the recent increases in mortgage interest rates means that monthly mortgage payments will increase by about £100 for the majority of households who re-mortgage this year.
Pantheon Macroeconomics warned that homeowners refinancing in 2022 will be hit by a “nasty shock” as their monthly mortgage costs increased.
The increase in mortgage costs means that a homeowner with the average £207,000 mortgage will be paying an extra £1,200 per year.
The average rate on a two-year fixed-rate 25pc deposit mortgage deal jumped from 1.29pc to 2.35pc in the six months to April, the fastest pace of growth in any six month period since 2003. Since then, the Bank of England raised the Bank Rate to a 13-year high of 1pc earlier this month, which will push up mortgage costs further.
Pantheon Macroeconomics forecast that the benchmark mortgage rate will peak at 2.8pc later this in 2022
This means that a homeowner who took out a two-year fixed rate that expires in 2022 will have to re-mortgage at a rate that is on average one percentage point higher than they are used to. Homeowners re-mortgaging after their five-year fixed-rate deals end will be in a similar position.
Its worth noting though that despite the recent Bank of England base rate increases, there are current some competitive 5 year fixed rate mortgages, which can be booked up to 6 months in advance.
At Broadland Consultants, our expert Mortgage Advisers can review the whole of the mortgage market for you for a Fixed Rate Mortgage Deal hopefully saving you time and money.
If you’re based in Norwich or Norfolk, our Mortgage Brokers offer face to face meetings (video and telephone appointments also available)
You can also ‘Live Search’ for a new mortgage deal on our website:
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE