Recent rise in interest rates and mortgage payments


Following the meeting on Friday between the Chancellor, Jeremy Hunt, and some of the major mortgage lenders, there have been some announcements of initiatives to be introduced to help mortgage holders who may be struggling with the recent rise in interest rates and mortgage payments.

While the exact details are only just coming through, there are a few things that will be making the headlines and I think it’s important to understand what these are and how it could affect you.

The first one is the ability to make a temporary change to your mortgage, by switching to interest only for up to 6 months. While this is a very tempting option, to reduce your monthly payments, it needs to be considered carefully as it will mean that your mortgage balance will not reduce and would increase the total amount you repay over the mortgage term. Of course, if you need to do this to avoid missing payments, then it is something that would be incredibly beneficial, but should only be used if necessary. It has been confirmed that taking advantage of this facility will not have a detrimental effect on your credit report. If any mortgage payments are missed, then this will impact your credit report and may mean you could struggle to be accepted on any future mortgage applications.

I would add that you should always look at your total finances to see if any savings can be made elsewhere before looking at switching your mortgage to interest only.

Banks have also agreed to delay any repossession action for 12 months for anyone who gets into severe difficulty with their mortgage. Hopefully, for anyone who finds themselves in this position, this 12-month period will give them time to get back on their feet and resolve their problems.

The most important thing to remember is to speak to your lender and mortgage advisor if you feel that you need help with your mortgage payments. Mortgage lenders will do what they can to help if you are up front with them. My team will always be available to talk if you need our help on this or any other mortgage related issue.

As always, please get in touch with Barlow Irvin Financial Services award-winning team if you have any questions or concerns around interest rates or the mortgage market as a whole and we will answer them for you.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

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The Barlow Irvin Team

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