Financial whizz Martin Lewis has said the biggest single personal financial risk in 2017 is that mortgage interest rates will increase.
In a Bournemouth Echo article from December 2016, he says that mortgage rates currently are at an all-time low and people may expect that to continue in the future. Lewis warns however that because of the rise in the swap rates, which influences the cost of raising money for lenders, some have already started to increases their rate. Other lenders have abolished their lowest fixed-rate deals.
Lewis, best known for his MoneySavingExpert.com website, urges all mortgage borrowers to check now if they are on the best deal, and if not, consider remortgaging to save money.
He warned that getting accepted for a remortgage is not always easy. For a start, lenders want to see a good credit score. There are, however, several strategies that can be used to increase a less than perfect one.
Another hurdle for some borrowers is that affordability tests are stricter than they used to be. Lenders may not only look at the ability to repay the mortgage at the current interest rates, but may assess whether payments can be maintained if the interest rates should increase to 6% or 7%.
Lewis’s final piece of advice is to use a mortgage broker, as they often have access to remortgage deals unavailable to individual members of the public. A mortgage broker will have access to a large range of mortgage deals and can also arrange mortgage protection insurance cover.