Mortgage interest rates are influenced by many factors, one being Brexit and the uncertainty around trade deals.
Analysts with a few more brain cells than myself are forecasting that interest rates will probably remain the same through 2020 or possibly reduce should the economy need stimulating.
Average Mortgage Debt based on January 2020 figures is £132,633. Lets assume that you have a Tracker Mortgage with a current average rate of 2.32% with a typical outstanding term of 20 years. You will be paying £691/m but a 0.25% increase will result in payments of £707/m. However, what if interest rates increased as follows over a period of time, what would payments look like…
0.50% = £723/m
0.75% = £740/m
1.00% = £757/m
1.25% = £774/m
1.50% = £791/m
1.75% = £808/m
2.00% = £826/m
Would you be able to make the increased payments and still maintain other financial commitments?
If you are concerned it might be worth reviewing your current mortgage and financial commitments.
And if you don’t have savings for a rainy day. Maybe now is the time to implement a robust savings strategy to cushion yourself from the impact of a possible weakening of the economy.