With interest rates on the rise, we welcome Nick Bone of local Timperley-based Greenwood Mortgages to feature as a guest on our blog. Nick lends his professional advice around interest rates and shares some top mortgage tips. Find out more…

The Bank of England base rate has been low for over a decade we have all enjoyed low borrowing costs. But are things starting to change? With inflation soaring the Bank of England has started to increase interest rates in a bid to cool things down. This is reflected in the recent base rate rise to 0.75%. The interest rate is discussed every 6 weeks, and the next monetary policy committee meeting is 5th May 2022.

Swap rates
Lenders use “swap rates” when making decisions about mortgage pricing. Short term swap rates are currently higher than long term swaps. This indicates that the financial markets predict interest rates to rise in the short term and then flatten or decline. This reflects the Bank of England’s outlook “We expect inflation to fall back and be around our 2% target in two- or three-years’ time”. But of course, these predictions can always change!

A competitive mortgage market
The good news is that the mortgage market is super competitive, and lenders want your business. In a historical context, mortgage deals are still low. As an example, we have seen the gap between two and five-year fixed rates shorten which give certainty of payment for longer. The Guardian recently reported, “High Street banks have launched a mortgage rate war for five-year loans”.

Mortgage planning is key
Choosing a mortgage is a big decision and can make a huge difference to your financial health. A quarter of UK mortgages are on variable or tracker type products. But the important thing to consider is how you would cope with any further rises in interest rates? Having the flexibility to cope with higher payments is important.
Whatever you decide, it is vital to plan.
Most borrowers are not aware that you can lock into a new up to deal six months before your current deal ends. Mortgage offers are typically valid for three to six months. I often get asked, “What’s the best mortgage rate?”. It’s a cliché response but it really does depend on your circumstances. At Greenwood Mortgages we have access to 70+ lenders, so we tailor our recommendations. The “best mortgage rate” will be bespoke to the individual.

Mortgage top tips

• Purchasing a property in Altrincham or the surrounding area? Get an agreement in Principle (an indication from the lender of how much they would be willing to lend). Your broker will also be able to give you an indication of cost and rate based on your circumstances.
• Own a property in Altrincham or the surrounding area? You can secure rates up to 6 months before your deal comes to an end. It’s worth dusting off the mortgage paperwork and getting a quote.
• Let a professional help. We do this every day and are up to date with what lenders offer and the criteria they are likely to accept.

Are you worried about rising interest rates? If you are looking for a first mortgage or would be keen to explore a new mortgage deal, contact Nick Bone at Greenwood Mortgages here.

As a local independent estate agent, helping our customers get the best mortgage deals is very important to us. So is customer service. So, whether you are buying, selling, or renting a home, you can be sure of the most attentive professional service from a team who truly know the Altrincham area. Contact us today.