Amid the cost of living crisis, rising inflation rates and thousands of people entering into debt for the first time, paying a mortgage has proven to be a complex and worrying process.
With recent warnings about the effect of such rising interest rates and the cost of mortgaging, we’re going to discuss a few main important points to arise from the conversation in this article. Read on to see what you need to know about rising mortgage rates.
Recent Mortgage Changes
The UK’s mortgage market has been a source of intense turmoil for millions of borrowers, as mortgage rates reach their highest levels since December of last year. Following the aftermath of Liz Truss’ mini-budget announced in September, the mortgage market has been struggling, with interest rates now expected to rise above 6% in the coming weeks. With hiked inflation rates still causing a huge financial issue for the UK, economic growth will slow even further as a consequence.
This week alone, big lenders such as Santander and NatWest have announced changes to their mortgage deals. Santander announced that they were withdrawing new deals temporarily because of the current market conditions, and NatWest remarked they would be increasing rates for new residential mortgages, as well as buy-to-let mortgages.
Over the past few weeks, lenders have been reactive with their mortgage changes, such as HSBC who temporarily suspended new deals with brokers, before reinstating them a few days later with higher interest rates. The volatility of the market suggests that interest rates are not decreasing at the speed in which many had previously predicted and hoped for, creating widespread financial worry for lenders and borrowers alike.
Compared to 3.03% and 3.17% for a two-year fixed-rate deal and a five-year deal back in May of last year, financial data company Moneyfacts stated that the rates are now hitting highs of 5.86% and 5.51% respectively. Needless to say, such tumultuous changes have caused a feeling of unrest amongst homeowners and many will be dealing with priority debts as a result.
Priority Debts & Mortgage Market Mayhem
Evidently, drastic changes within the mortgage market at short notice can often lead to more homeowners incurring priority debts. Combined with the increased cost of living in several areas such as energy bills and groceries, mortgage payments may become unaffordable for many households as we continue to navigate tough interest rates.
At Angel Advance, we offer a free, no-obligation debt advice service to help you understand what your options are in the event of dealing with priority debts – or any other debts for that matter. Our debt advice service is available 24/7, and can be accessed via our online tool, by phone, WhatsApp or email, providing you with your preferred choice of contact.
We will give you more information about the options available to you going forward, and should you decide to progress with a debt solution with us, fees will apply.
