Borrowers rush to get new fixed term mortgage deals as rates jump again

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Brokers said today that older homeowners are speeding up fixed-rate mortgage deals to re-lock in the face of further steep hikes in borrowing costs.

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Many who have taken out huge home loans at record low mortgage rates now face a steep rise in costs as their fixed deals expire and will pay fees on early redemption rather than risk exposure to higher rates.

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All major lenders are re-evaluating their fixed deals this week ahead of the Bank of England’s decision this afternoon to raise rates by 0.5 percentage points to 2.25%.

This is the highest rate for 14 years.

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Anil Mistry, RNR Mortgage Solutions, said: “The global financial crisis created an artificial rate environment that lasted almost a decade and a half, and now we can get out of it.

“Many borrowers and homeowners are being brought back to earth with one blow. Borrowers who have fixed rates in recent years, possibly 2% and less, are now in the higher tier of fixed-rate products or One can even expect four to begin with.

Rob Peters of Simple Fast Mortgage said: “Borrowers coming out of the fixed rate mortgage deal are seriously unprepared for the full 240V interest rate shock they are about to receive.”

Ross Boyd, of mortgage comparison platform “A large amount of homeowners and buyers have never known rates this high. Factor in the effects of skyrocketing inflation and an economy that’s on edge, and you have lane- All the ingredients for a severe slowdown in lending levels as people are turbulent for the next twelve months.”

A report this week from the Money Advice Trust found that one in five UK adults, some 11 million people, are behind on one or more household bills. One in nine say they have gone without food.

An estimated 7.7 million (14 percent) said they had sold personal or household items to cover bills.

Meanwhile, sterling is once again in trouble on forex exchanges this morning ahead of a crucial decision on interest rates.

The pound fell below $1.13 to a new 37-year low after the US Federal Reserve added 0.75% to the cost of borrowing.

At one level sterling was down almost a full percentage point at $1.1212, before regaining some ground and trading unchanged against the dollar as of late morning.

Investors are concerned about the risk of a recession, the impact of Liz Truss’s planned tax cuts – due to be revealed by Chancellor Quasi Quarteng yesterday – on already sprawling public finances, and the need to follow the lead set by other central banks. Bank’s desire.

This morning the Swiss National Bank joined the “0.75% club” with rates rising by three quarters. This means that there are no countries left with negative rates in Europe. Norway’s Norges Bank, however, opted for only a 0.5% hike.

Credit: /

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