As a New Year dawns, most of us have taken a sigh of relief that we have managed a relatively ‘normal’ Christmas. For landlords, a new year usually brings forward some type of new change, challenge or opportunity, and many of our clients take this period to review their investments and plan for the year ahead.
Although the last two years have been challenging in many ways, landlords and homeowners have enjoyed exceptionally low mortgage rates throughout this period. However, all good things must come to an end, and if SWAP rates are anything to go by, then the end is very much insight.
On the 16th of December, we reported when the Bank of England voted to raise the base rate to 0.25% in an attempt to curb the rising rate of inflation, and that this was unlikely to be the end of the matter. It is, of course, impossible to say for certain what the Monetary Policy Committee (MPE) will do in 2022; however, they meet again on the 3rd of February (not in January as some commentators are advising), and it would be a genuine surprise if a further increase wasn’t approved, as the Bank of England is keen to ensure that the inflation rate doesn’t rise too high. The markets are also predicting further rises in the Spring to 0.5%, to 1% by the end of 2022.
What does this mean for landlords? If the experts are right, for a simple calculation, apply that increase to your existing mortgage and work out if you want to wait and see, or act now? If you haven’t already worked it out, we really do believe that now is the time to review your existing mortgage requirements.
Whether it’s to:
- Ensure you’ve got the lowest rates possible
- Fix a new rate for the longest time possible
- Refinance your portfolio to secure extra borrowing before rates increase (giving you the cheapest funds available to purchase again), or,
- Simply give yourself peace of mind that you’ve got the best deal available.
Whatever the reason, you won’t get the opportunity to secure rates as low as they currently are for a long time to come.
If you have a mortgage coming up to the end of its fixed term in the next 6-8 months, don’t forget that some lenders will honour their offers for six months, so you can take advantage of today’s rates, as mortgage rates are already rising and they almost certainly won’t be this low in 6 months’ time. If you are unsure whether you can take advantage of any of today’s rates, we offer a free portfolio review service. Simply send us the details of your portfolio, and one of our specialist team of brokers will review your entire portfolio and give you advice on your best mortgage options, click here for a copy of our portfolio template.
So, if you make only one New Year’s resolution this year, make sure it’s to get your property finance sorted today before it ends up costing you more money.
5th January 2022