17th March 2022
Bank of England raises interest rates to 0.75%

The Bank of England's Monetary Policy Committee (MPC) voted to increase the base rate of interest for the second consecutive month.

Policy makers voted 8-1 in favour of the increase, citing rampant inflation (the cost of living) which currently sits at 6.2% way above the 2% target set by the government and above predictions for where inflation could rise to in 2022.

The ending of Covid restrictions, oil and energy

In the latter part of 2021 the Government had to increase the energy price cap as many smaller energy providers were going bust as their margins turned negative (they were selling energy for less than they were buying it for) so the reality of significantly increasing energy bills was already upon many consumers and the outlook was bleak with further increases likely.

Consumption (buying) from the general population also increased as Covid restrictions were eased and fears over the Omicron variants subsided rapidly. Increased demand can outstrip supply and lead to prices for some goods rising quickly.

Then there's the terrible events unfolding in Ukraine since the end of February which whilst unquestionably are worst for those directly involved in the conflict, has worrying and destabilising effects for the world and particularly Europe. This manifested in huge rises in the price of oil which has knock-on effects for general inflation as transporting goods becomes more expensive.

Context

The base rate now, despite three rises over four months, is only back to where it was before the pandemic started in February/March 2020 and that was already extremely low historically. This however hasn't stopped lenders increasing rates quickly so the advice is to get advice sooner rather than later if your mortgage deal is due to expire in the next 6 months or if you're planning to move or borrow for e.g. home improvements.

What does this mean for your mortgage?

Those with applications in progress should check with their broker or lender to ensure the mortgage rate they have applied for has been secured. Those considering application should act now as it is likely lenders will be re-pricing their products in the near future. Those who already have a mortgage will largely fall into two camps, those with fixed rates who won't notice any change in their monthly payments whilst still on their fixed rate, and those with variable rates such as trackers or discount rates who will likely be receiving letters from their lenders in the coming days informing them of an increase to their interest rate and monthly payments.

What should you do?

If you have a mortgage check your mortgage offer, this will explain when your current deal ends. If this is within the next 6 months, or if it has already ended, then you should contact us now as you are likely to be able to secure a new deal to start when your existing one ends and before currently available deals increase!

You can read the minutes of the latest Bank of England Monetary Policy Committee meeting here.

16th December 2021
Bank of England raises interest rates to 0.25%

For the first time in three years the Bank of England has increased the base rate of interest from the all time low of 0.1% to 0.25%

Policy makers voted 8-1 in favour of the increase, citing rampant inflation (the cost of living) which hit a 10 year high of 5.1% in the year to November 2021, well above its target of 2%. The bank further warns that inflation could hit 6% next year.

Omicron fears

Despite worries that the economy may start to slow in the first quarter of 2022 as consumers cut-back after the Christmas period and are less likely to shop on the high street amid the rapidly spreading Omicron variant, the runaway inflation was clearly enough a concern to have policy makers take action.

What does this mean for your mortgage?

Those with applications in progress should check with their broker or lender to ensure the mortgage rate they have applied for has been secured. Those considering application should act now as it is likely lenders will be re-pricing their products in the near future. Those who already have a mortgage will largely fall into two camps, those with fixed rates who won't notice any change in their monthly payments whilst still on their fixed rate, and those with variable rates such as trackers or discount rates who will likely be receiving letters from their lenders in the coming days informing them of an increase to their interest rate and monthly payments.

What should you do?

If you have a mortgage check your mortgage offer, this will explain when your current deal ends. If this is within the next 6 months, or if it has already ended, then you should contact us now as you are likely to be able to secure a new deal to start when your existing one ends and before currently available deals increase!

You can read the minutes of the latest Bank of England Monetary Policy Committee meeting here.

28th October 2021
How higher predicted inflation rates for early 2022 could affect your mortgage

We believe we here at MM Mortgages are the best mortgage broker Colchester has to offer, and like the best, we are always looking to offer our customers the very best deals. We are always looking to take advantage of any industry news or events that could benefit our customers. So we took a vested interest in events happening at the Bank of England in central London today.

With inflation predicted to rise to around the 5% mark in 2022, there was speculation today that the Bank of England would raise the base rate of interest, which has been set at the historic low of 0.1% since the beginning of the pandemic. But after a meeting today, the Bank of England has ignored mounting pressure to raise the base rate, and have confirmed that the rate will remain unchanged at 0.1% for at least the next 6 weeks.

What are base rates, and how they are determined?
The base rate is determined by the Bank of England’s monetary policy committee (MPC), who meet 8 times a year (roughly every 6 weeks) to decide the level of interest that commercial banks are paid on their deposits held at the Bank of England, this, in turn, influences the rates of interest charged to borrowers by those banks on all financial products, such as mortgages. And as the best mortgage broker Colchester can boast we know that any change on the base rate can affect our customers, so we have provided the following information for those of you who have concerns about your mortgage deal.

How does the base rate affect the economy?
When interest rates are low borrowing becomes cheaper, which encourages both companies and individuals to borrow more (and therefore spend more money). When this happens the rate of inflation increases. Alternatively, when interest rates are high both businesses and individuals are more likely to save their money (and not spend as much), as they are getting a better return on their money. This scenario tends to lead to a lower inflation rate.

Will inflation rates rise by the end of the year?
When interest rates are low for a prolonged period the rate of inflation keeps rising above what is believed to be the optimum rate of 2% a year. With the base rate being at 0.1% for so long this has caused inflation to rise as high as nearly 4% in 2021, with expectations this could rise to around 5% in early 2022. And with higher inflation, you get more expensive goods and services, as we’ve seen with recent price hikes in energy bills, food costs, transport and fuel.

To combat over inflation the Bank of England may be forced into raising the base interest rate, which would have a direct effect on mortgages, and those looking to remortgage their property.


What will this mean for your mortgage?
So first things first, if the base rate is raised above 0.1%, which as explained above, is looking increasingly likely, then mortgages will become more expensive. For those of you on a variable rate mortgage deal, your rate will likely increase in line with any changes the Bank of England make. If you are on a fixed deal then any changes to the base rate or increased interest rates won’t affect you until your current mortgage deal expires. But if you require further information and advice on what this could mean for you, then feel free to contact the best mortgage broker Colchester has, MM Mortgages, and we will be happy to discuss options with you.

Switch your mortgage with the best mortgage broker Colchester has!
So with an uncertain future surrounding interest rates, and the implications this could have on mortgage deals, now could be the ideal time to switch your mortgage. The team at MM Mortgages are ready to discuss the best options for you and to source the best deals on offer for remortgaging from your existing lender. In fact, being the best mortgage broker Colchester has isn’t just about offering customers the best deals. We actually pay YOU for switching your mortgage with us. Learn all about our Mortgage Switch service, and find out how you can earn up to £100 by switching your mortgage.

Why a mortgage switch could be the ideal solution for you.

Are you considering a mortgage switch on your home? When you take out a mortgage for a property it is one of the largest investments you are ever likely to make, so it stands to reason you would want to protect this investment by ensuring you are getting the best deal on your mortgage whenever possible. Depending on your original mortgage deal, you may want to consider a mortgage switch several times throughout your mortgage tenure. Your mortgage deal with your current provider may have been competitive when you first signed up, but in the current market, you may have realised there are better options available to you.

There are many other varied reasons that homeowners look for a mortgage switch, whether with the same provider or by switching their mortgage provider completely. It may be that your current deal is simply coming to an end. Perhaps you are looking to release equity? Or are there restrictions on your current mortgage that no longer work for you, and you are looking to move away from that deal?

Whatever the reason, by regularly reviewing your mortgage, and remortgaging when there is a better deal (and it is possible), you are likely to save a considerable amount of money over time. New deals are arriving on the market all the time, so if you’re not locked into a fixed (or discount) rate deal with an early repayment charge, it is definitely worth looking at a mortgage switch.

We suggest, at the very least, to regularly review your current mortgage deal to ensure you don’t miss out on the better deals that may be available. When reviewing your mortgage be sure to check the following:-

* When interest rates fluctuate as this could affect how competitive your current deal is.

* If your current mortgage deal is coming to an end, as your rate could increase.

* Or as a rule of thumb review once a year (if you’re not tied into a contract with early repayment penalties), to see how your current deal compares to any new deals that have appeared on the market.

Mortgage Switch with MM Mortgages

So now you know the reasons why you should consider a mortgage switch. But what next? There are so many options out there that it can be confusing, and as mentioned above your mortgage is probably your largest investment, so you want to get it right. And if you can also get paid for a mortgage switch, then all the better!

MM Mortgages specialise in finding customers a better deal with their existing mortgage lender. Not only that, but we also pay our customers for using our services! How can we do that you ask? Well, our Mortgage Switch service has been created to allow mortgage borrowers a share of the commission we earn for finding customers a new mortgage deal with their existing lender. So our customers actually get paid for switching their mortgage!

As long as you adhere to our terms, if your mortgage balance is £100,000 or more then you will receive £100 within 14 days of the start date of your new mortgage deal. If your mortgage balance is less than £100,000 then you will still receive £50. It’s that simple!

All we require to get the ball rolling is for you to provide us with some basic information, we will then collate the best deals from your current mortgage provider for you to choose from. You can then pick the best deal for you, leaving you to relax knowing our expert team will set everything up. And then within 14 days of the start date of the new deal, we will send you your share of the commission!

If you are considering a mortgage switch, then why not get paid for it? Or if you just want to see what options are available to you, then our Mortgage Switch service is perfect. Delaying could end up costing you more money, so why not get started now? Head over to our Mortgage Switch page to begin your journey toward a better mortgage deal!