Bank of England: half of borrowers will see mortgage repayments rise

It's now coming into the Christmas period and for many people it's the time to start thinking about festive decorations, a tree, what to buy Auntie Betty when she already has everything, how much to spend on the kids, and what treats to fill the larder with for the few days that will comprise eating and drinking.

There will be some people in hardship and won't be able to spend that much on Christmas, of course, and there will be homeowners who will be juggling the household bills as prices seem to be forever rising on basics such as heating the home.

So, surely it was some good news in November that the Bank of England had cut the base rate to 4.75% from 5% after it had been steadily rising or had been held at a relatively high level for several months in a row.

But was it really all good news?

Analysis by the Bank of England shows that half of those with mortgages will see their repayments rise in the next three years. This analysis further suggests that there will be 4.4 million borrowers who will be affected to some degree.

Normally, with a cut in the base rate - the most recent being a quarter of 1% - lenders follow by reducing their mortgage rates to borrowers, making the monthly repayments a bit lower. But, with instability growing in global financial markets, this is making the financial outlook in Britain somewhat gloomy. 

The practical upshot of this situation is that lending money is generally perceived to be of greater risk, which, in turn, means that borrowers will bear the brunt of lenders' risk aversion.

However, because there is a broad cut of 50% of the borrowing population who will be adversely impacted by financial decisions made by the mortgage companies, it does mean that there will be 50% of borrowers who either won't see any change or might even reduce their payments (the Bank of England analysis suggests that this is roughly a quarter for each).

What can a borrower do in such straitened times? If you are at all worried about your repayments, particularly if they are going up, you should talk to your mortgage lender. You can also seek help for a mortgage broker, although they might charge for their time, or you can ask for guidance from experts such as Money Saving Expert as to what your options might be.

You might also want to consider the possibility of remortgaging your home in order to get a more preferential rate than the one you are on right now. Talk to your lender, do your homework to see what mortgage deals are out there, and perhaps talk top a mortgage broker who will have all the information available on the most suitable product on the mortgage market for your needs.

Interested in remortgaging your home with a different lender? That's where you can rely on the experts at Homeward Legal to help you with a thorough job of the legal side of things. 

They will start work on your planned purchase as soon as you agree to the quotation and appoint them to represent you. 

Homeward Legal will also provide a quote that will not change - what you are quoted is what you pay for standard conveyancing process, which means you can effectively budget for your conveyancing needs.

There are some unforeseen items that might arise during the purchase and/or sale, which includes a specialist flood assessment report, but the solicitor discusses these and their cost as they come up. 

In addition, to protect the homebuyer further, Homeward Legal operates a ‘no completion, no fee' promise, which ensures that, should the purchase or sale not go through as planned to completion status, no payment is required.

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to move.

Or you can get a quick quote, using Homeward Legal's easy-to-use quote generator.