Contractor Mortgages Rate Rise
Today, the Bank of England decided to keep bank rates on hold, for now. However, the day is coming closer and closer when the Governor of the Bank of England will announce a contractor mortgages rate rise.
This would push up the cost of mortgages for UK contractors. Many smart contractors have been taking out fixed rate contractor mortgages while they still can.
However, already the cost fo fixed rate mortgages is starting to rise as lenders anticipate the next base rate rise.
Rate Rises for Contractor Mortgages
It was expected that the base rate rise would happen by the end of the year. However, it is more likely to be in the first quarter of next year before mortgage rates go up.
We have had record low-interest rates for six years now as the Government sought to fight the savage downturn. However, the downturn is over now and the next change in base rates will now be up. It is just the timing now.
As well as mortgage being more expensive for contractors, when base rates do go up, they will also be able to borrow less.
Mortgages Expensive for Contractors
When base rates go up they can often go up rapidly in more than one hike. The reason is that they go up to stop inflation and to stop the economy overheating. However, it takes months for this to take effect.
With the economy overheating even more, and inflation increasing, the Panel and the Governor of the Bank of England will keep looking for more rises.
This could make mortgages much more expensive for contractors. That is unless they take advantage of the current fixed rates on offer at specialist contractor mortgage brokers.
Many of those contractors on variable rate mortgages, who have been enjoying low mortgage rates for six years now, will get quite a shock when their monthly payments start to rise in maybe several chunks.
Fixed Rate Mortgages for British Contractors
It would be a good time for them to swap into a fixed rate mortgage. That would take away any nasty surprises that are likely to start in the first quarter next year.
However, it would be wise not to wait till then. This is because the rates for fixed rate mortgages are likely to rise before then, in anticipation of base rate rise to come. The sooner they change over to fixed rate mortgages, the better, and the cheaper it will be for them.
To find out more, before a contractor mortgages rate rise, or to apply for a fixed rate contractor mortgage from a specialist contractor mortgages broker, just click on Contractor Mortgage Application and fill in the form there.