METRO interest rate rise - what should borrowers do?

To effectively manage the impact of rising mortgage costs, borrowers should first assess their current mortgage terms and understand how the increasing rates will affect their monthly payments. Consider refinancing to secure a lower interest rate, but carefully weigh associated costs. Prioritize prudent financial management by adjusting your budget and reducing non-essential expenses. Maintain open communication with your lender to explore alternatives or loan modifications. Stay informed about the markets and monitor interest rate movements. By taking these measures, borrowers can navigate the challenges of rising rates, make informed decisions, and protect their financial well-being.

Taking a close look at your mortgage arrangement will provide insights into the specific impact of rising rates on your monthly payments. Exploring refinancing options can help secure a lower interest rate, but weigh the costs involved.

For existing borrowers who need to remortgage at the end of this year. I would say that they should lock a rate in now as long as they are within 6 months of the expiry of their current product. If something better comes up they can always apply for that closer to the expiry of their deal.

Anyone with 3 or 4 years left on a fixed rate shouldn't worry. More than likely the landscape will be completely different in that timescale and rates today will have no bearing on rates in the future.

If the only option for a borrower is a PT then they should look to take it. Even if the rate isn't as good as they would get on the open market it will still be better than paying their lenders standard variable rate.

For first time borrowers I think the biggest thing is to not over commit yourself, buying a 'starter home' whilst rates are high is better than trying to buy the perfect home now and over-extending yourself.

The best advice I can give at the moment is to speak to your adviser as soon as possible. We can secure you a rate 6 months in advance. What most clients don't realise is that if you lock in your rate 6 months in advance but rates reduce your adviser can request your mortgage offer be amended to reflect the lower rate. A good adviser should continuously review your mortgage for the 6 months between securing the rate and the new mortgage completion. Don't delay speaking to your adviser.

1. Existing client's remortgage this year. Contact your broker at least 3 months before deal ends. We do this as a matter of course for all of our existing clients.
2. Clients with 3 or 4 year left to run on their mortgage deal. Sit tight as changing now would be a really bad idea.
3. Borrowers on the SVR. Why are you on the Svr and not done anything yet. Contact a local broker straight away.
4. In parts of the UK mortgages will be affordable, if you look at mortgage rates over the last 20 years 6% was the norm prior to the crash in 2009.
5. I would think that rates are about to peak, i think rises in the range of 0.5% will happen today. The lenders will have to price in products that are affordable, or we will go into recession and then a crash in property values.
6. Property will fall in price, House prices have been overpriced in certain parts of the UK for years and it will be long overdue. They will feather back up.

Talk to a broker, see if there is a way out. Review insurance and utilities, then review your spending. see what you actually need and what you can do without. Can you go without something for a few months?

FTB, talk to your brokers about rough monthly costs too. Not just the mortgage. Work out if its affordable after all.

Beyonce is definitely NOT to blame for UK inflation or the bank base rate rise - I think we need to look more closely at the guys in suits who are supposed to be in control and not dear Ms Knowles. It's clear mortgage account holders with a fixed rate ending this year should look to a minimum 2-year deal in our opinion, 1-year if there were any. Tying into a deal for longer than this would mean them suffering from these overinflated rates for longer than could be necessary. It is difficult now to predict the future with inflation being so stubborn to reduce in the UK. Some first-time buyers are currently already suffering from increased rents so the benefit of owning their own homes and gaining, potentially, from an increase in equity, probably still has the edge. I'd like to think that with the disaster news all out now there is the potential of swap rates decreasing in the coming weeks which will reflect hopefully in lower fixed deals coming available.

The mortgage rates might go up further as the general expectation was a 0.25% increase with the base rate

In turbulent times it’s important to keep a calm head and knee jerk reactions to short term volatility could prove costly for many so it’s vital that advice is taken and due consideration is giving to all the factors, before type of mortgage borrower takes action or makes any significant decisions.Rather like the feeding frenzy of a great white shark, the headlines recently have been thrashing rabidly around tales of the impact of the current volatility and daily updates on what the latest “average” rate has become but although understandable and newsworthy, this only serves to add a chump of fear to already bloodied waters. The reality is that the approximately 80% of UK mortgage holders who have 6 months or more left on their initial fixed deals,need not concern themselves with or jump into the shark pit as they are fortunate enough to be unaffected currently and to have plenty of time to allow the waters to calm.For the remaining 20%, bespoke advice has never been more vital.

First time buyers are in a unique position as they have never had a mortgage or an interest rate before so this is all new to them. We are finding that as long as the mortgage fits the affordability they had budgeted for the interest rate is not causing much of a problem. I would say though that over the last 6 months the types of properties the FTB are going for are well within their budget rather than trying to max out like the last few years when rates have been super low. FTB are the refreshing part of a complicated and unsettling market.

Existing borrowers, the message to get out their is plan well in advance, be speaking to a broker 7 months before your deal ends, given the broker plenty of time to recommend and review and change the rates if the market improves, leaving to the last minute reduces your options to a PT or the eye watering SVR rates.