What does the interest rate rise mean for buying or selling in Crawley?
How much has the bank rate risen?
The Bank of England have raised the base level interest rate by 0.25% to 4.25%.
What does this mean for my mortgage?
This base level rate is the rate at which the banks will base their own rates for mortgages. However, in most cases the rate at which banks loan mortgages is often slightly higher than the base rate. That’s to take into account any associated risk depending on how big the loan is and any admin fees for the bank such as salaries.
This means if you’re on a variable or tracker mortgage, your monthly payments will increase based on the Bank of England base rate change. If you’re on a fixed term mortgage, your monthly payments will stay the same as when you agreed the mortgage with your lender and the rates set at the time. However, it’s useful to look ahead at when your fixed term mortgage is up for renewal and to plan ahead for any increases.
What are the current bank mortgage rates?
Most banks adjusted their mortgage rates in October 2022 in line with the projected forecast of interest rate rises for the year ahead. That’s so when lenders are agreeing any new fixed rates with home buyers, it’s taking into account future rate rises. As it’s widely thought that the base level rate will peak at 4.5 to 5% in 2023, banks had already factored that in. Therefore, it’s unlikely new fixed term mortgage rates will change that much.
If mortgage rates are going up, are less people buying and does that mean house prices in Crawley are falling?
Not necessarily. There are still more people that need homes than houses available so demand is still relatively high against supply. The employment market is also still strong despite recession so although house prices might not be rising as quickly as before, they are not dropping as some might expect.
Particularly in Crawley where there is a relatively strong economy in the South East, most people remain in work, and it is a popular place to live.
Should I sell my house as my fixed term mortgage rate will increase when I come to renew in a few months’ time?
Our advice would be not to panic and to plan ahead. Look at your options and seek support if you’re worried. There are a few people you can talk to locally to advise on what you can do. Your bank may also be able to help and there are options available such as mortgage holidays.
I bought a house in Crawley. Will I be in negative equity if I sell it now?
It will depend on when you bought your property and how much you’ve paid off already, however it’s unlikely based on current circumstances based on the area and what we’re currently seeing. There are places where you can get support or advice or around this if needed.
How do I get on the property ladder in Crawley in light of rate rises?
Sometimes it’s not obvious all the options available to and it’s worth talking to a mortgage advisor to understand what you might be able to do. Give us a call on 01293 582335 or an email at info@inspireestates.co.uk and we can help explore your options.
Image credit to BBC News (https://www.bbc.co.uk/news/business-57764601)