Guys, today I just want to share with some of the important facts about rate rises. This article will be presented in the point forms. So here it is:

Your mortgage must not always get affected by a rate rise

One very important thing you have to know as a mortgage hunter is you must be well-informed whether your chosen mortgage is easily affected by the rate rise. To learn easily about this matter, you can use this following quick guide.

Fixed rate mortgage

Taking a fixed rate mortgage allows you highly to get your interest rate fixed. It means that it will not rise even though there is a rise in the market of mortgage interest. But you need to know that your lender’s standard variable rate will rise when the Bank of England increases the base rate.

Consequently, it can affect your finance in the long run because your repayment will significantly rise at the end of your fixed rate period, specifically if there is a significant gap between the interest rates charged on you now with the one when you took this fixed rate mortgage. However, you can avoid this by remortgaging to a new lender to get a new fixed rate period.

Variable rate mortgage

Taking variable rate mortgage will allow the lender to adjust the interest rate immediately to the base rate enacted by the Bank of England. Consequently, you must cover the higher monthly repayment as it will also automatically rise. This is the harsh disadvantage of taking variable rate mortgages.

However, you can also obtain good advantages from this variable rate mortgage, that is; you can avoid the future possible rate rises. You know that when the interest rate during your mortgage term decreases, your monthly repayment will fall as well. So, in the long run it helps you manage your finances better.

Moreover, you can get variable rate mortgages that offer discounts. By then, if there is a sudden rise in the interest rate, the impact you get will be less.

End of part 1, read here for part 2.