August 21

Landlords Need To Lock in Fixed Rates for Remortgaging


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Landlords preparing to remortgage are advised to lock in a new rate well in advance, even up to six months before. Gavin Richardson, Mortgages for Business MD, predicts a dip in inflation to around five percent by year-end, yet the Bank of England is likely to raise the Base Rate by 0.25 percent in September.

Despite expected inflation easing, Richardson recommends early rate securing. Some lenders permit this up to six months prior to the Early Repayment Charge period’s end. If rates decrease, a switch to a more competitive product may be feasible before completion.

“If you hold a tracker or variable mortgage linked to the Base Rate, there’s a window to secure a fixed-rate deal before the upcoming [Bank of Ireland] meeting. Don’t wait, as a Base Rate hike means higher mortgage repayments. Consult a broker to explore fixed-rate options for potential monthly savings.”

Recent government data revealed a 6.8 percent Consumer Price Index inflation rate for July, down from June’s 7.9 percent. Inflation peaked at 11.1 percent around the failed Truss-Kwarteng mini-budget in October. The Bank of England convenes on September 21 for Base Rate deliberations. Richardson concludes, “Barring unexpected changes, we anticipate the next increase to be this year’s final one.”

Gavin Richardson’s insights from Mortgages for Business offer valuable perspectives on this issue. As the Managing Director highlights a potential dip in inflation to around five percent by the year’s end, landlords face a distinctive situation. However, despite this projection, careful attention is warranted due to the anticipated 0.25 percent Base Rate increase by the Bank of England in September.

Richardson’s counsel to secure a new rate in advance highlights the delicate equilibrium between the expected easing of inflation and the likelihood of interest rate adjustments. This proactive stance resonates with landlords, aiming to counter the potential impact of future rate fluctuations on mortgage repayments.

For individuals with tracker or variable mortgages linked to the Base Rate, a significant window of opportunity arises. By taking advantage of the period before the impending [Bank of Ireland] meeting, landlords can explore fixed-rate alternatives. Swift action can act as a shield against the projected rise in mortgage repayments that often accompanies a Base Rate hike.

Amid the landscape of inflation variability, the recently disclosed 6.8 percent Consumer Price Index inflation rate for July offers contextual insight. This figure signifies a decline from June’s 7.9 percent, indicating shifts in economic dynamics. Drawing a comparison to the pinnacle inflation rate of 11.1 percent around the period of the Truss-Kwarteng mini-budget in October underscores the intricacy of financial planning.

As the anticipation mounts for the Bank of England’s gathering on September 21, the financial environment remains uncertain. The delicate equilibrium between stabilizing inflation and possible Base Rate adjustments introduces an element of unpredictability.

Richardson’s conclusive assessment, forecasting a prospective final increase this year, underscores the ever-evolving nature of economic circumstances. Against this backdrop, landlords must navigate the intricacies of mortgage rates, seeking proactive strategies to shield their financial welfare.


Read more Property Investing News HERE



Bank of England base rate decision, Bank of England Remortgaging, Remortgaging in UK 2023

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