The country is facing possibly the toughest economic struggle that we have seen since the 2008 financial crash. As a direct result of the COVID-19 Pandemic, the war in Ukraine, and lets face it a mismanagement of the economy by the most recent government. Thousands of Britons will see the cost of living going up, financial strain increasing, and the metaphorical noose of debts and bills tightening. As experienced mortgage brokers and specifically remortgage experts, we highly recommend that our clients remortgage to cut costs as soon as possible.
What Is Happening With The Economy Right Now?
Prior to the COVID-19 Pandemic, the Bank of England’s base rate (the rate that the Bank of England charges banks and financial institutions for loans) was at 0.75%. As the pandemic took hold of the country and the world at large, the Bank of England knew that the economy would struggle so they reduced the base rate to 0.25% on the 11th of March and then down to 0.1% on the 19th of March 2020 to help control the economic shock of the coronavirus pandemic.
The rate remained at 0.1% until the 17th of December 2021 when it raised to 0.25% again. It then increased on a regular basis as the post-covid era came in and economic instability increased. The base rate reached 1% in June 2022 and then dramatically shot up to 1.75% last month which brings us to where we are today. Unfortunately, it looks like the increases so far haven’t worked to cool inflation and the bank will most likely make some more dramatic base rate increases which could see rates increase to 4% by 2023, as reported by the Guardian recently.
What Does This Mean For Mortgages?
As the base rate increases and money and borrowing money becomes more expensive, all the mortgage lenders in the British mortgage market are increasing their interest rates in line with the base rate. Meaning that interest charged on mortgage loans is going up and monthly mortgage payments made by home owners is increasing. As the average cost of day to day living and essentials is increasing too, people are finding that they have less money to spend and inevitably people will start to struggle to cover bills, credit commitments, and existing mortgages.
Sadly, a recession coupled with rising costs of living will see people defaulting on their credit commitments such as loans, credit cards, and mortgages. This will inevitably see an increase in property repossessions if people don’t act now to get their mortgages under control.
Should I Remortgage To Cut Costs?
It is very clear to us that the best thing you can do at this moment in time is to look at your remortgage options with a mortgage professional to see if they can help you to cut costs. As part of our commitment to always be there to offer advice and support to our clients, we are offering free financial health checks to anyone who wants it. These checks will be carried out by a professional financial advisor who will take a look at your current mortgage situation and make sure that you are getting the absolute best out of your deal. Not just now, but in the future too so that you are financially secure and won’t struggle with costs during the economic struggles.
The best way we can help if you are struggling or potentially could struggle with your current mortgage, is to look at your remortgage options. When we say remortgage, we don’t mean completely destroying your current mortgage and scraping together a random new one. Our advisors will carefully look at your current deal and using their experience and foresight, will assess your situation. They will then make recommendations on how best to re-structure your mortgage deal so that you get the most out of it. If that means moving to another lender, then that might be the best option, but that is not the case for everyone.
Often, doing things like extending your mortgage term with your current lender, reducing or increasing your mortgage amount, or switching to a different product with your current lender is the best option. As you already have a mortgage with the lender, the remortgage process carried out by a professional advisor is often quick and smooth. Before you know it, your mortgage and finances will be manageable and beneficial.
Getting Professional Advice To Save You From Mortgage Stress
The remortgage process needn’t be complicated. We’re on hand to walk you through all the remortgage steps. Remortgaging your home may be an attractive option, especially if you like your current property but want better value for money out of your borrowing. Or maybe your circumstances have changed since you took out your last mortgage and now you want to restructure your finances. Or perhaps you want to remortgage to pay for home improvements.
With market leading fixed-rate and fixed-term deals available, having Oportfolio move you from your current deal could be in your best interests. At Oportfolio, we offer residential mortgage and buy-to-let mortgage services that take everything into consideration, such as your financial situation, deposit and preferred length of loan, before presenting you with a handful of residential mortgage products that fit the bill perfectly.
If you or anyone you know is concerned about their mortgage during the economic crisis, don’t sit in silence or wait until its’ too late! Contact our friendly and helpful advisors today to see how we can help.
