Realistically, what happens to your mortgage if the UK leaves with or without a deal?
The media scaremongering would lead us to believe there will be a Brexit apocalypse, but no one can predict the future. Interest rates could either rise or fall, it really will depend on the economy and this is likely to be handled as it would be now whilst we’re part of the EU. For example: if the economy is slowing down, the government may reduce interest rates to help encourage growth. However, they may decide to raise interest rates if inflation becomes a problem.
What we know if interest rates rise
If interest rates increase, for those not on fixed rate deals – it’s very likely that your mortgage rate will go up. If you need to stick to a budget and you’re on a variable rate mortgage, you may be worried about rates rising. Therefore, you may want to consider a fixed rate deal now. It’ll give you the peace of mind that your mortgage repayments will not increase during the period of the fixed term.
If you’re already on a fixed rate mortgage, your interest rate will stay the same until your current mortgage ends. You’ll need to think about what to do when your deal comes to an end; if you’re a Finance Advice Centre client we’ll give you a reminder of when it’s ending and we’ll help you find a new rate that suitable to your circumstances.
What we know if interest rates fall
If interest rates drop, it could be great news for you. Especially if you ‘re looking to remortgage or if you’re on a variable rate mortgage. This should hopefully reduce your monthly mortgage payments! More money to spend on holidays, shopping or the family.
If you have a fixed rate deal and the rates fall, you wouldn’t benefit from any reduction and therefore wouldn’t see your monthly payments reducing. It’s likely the deal you’re on will have redemption penalties meaning that you would pay to move away from that rate/lender.
However, it’s always worth speaking with one of our advisors to discuss your options as you never know; it might still be beneficial to change rates.
For further information call 01332 821 340, no matter what your circumstances Finance Advice Centre will work hard to find that right mortgage for you.