Beat the Rate Rise

I got this write up from what mortgage website and is written by Jennifer Lowe. I find this one so important because of the continuous increase of interest rate that's why I'm sharing this one to all of you.

As expected by many and predicted by the so called "experts", the interest rate was increased today by 0.25 per cent, leaving many homeowners in a financial pickle.

The Bank of England has confirmed today that interest rates will rise to 5.75 per cent, adding an extra £16 a month on an average £100,000 repayment mortgage and £23 per month to a £150,000 home loan.

And many experts are predicting more increases before the end of the year, but here’s what you can do to protect yourself.

If you're paying your lender's Standard Variable Rate (SVR), switch!

If your mortgage deal has run out, you will no doubt be currently paying your lender's SVR.

As one of the most expensive ways to borrow, you must start looking for a cheap deal immediately and remortgage!

If you don't like surprises, fix.

The most obvious solution to avoid the pressure of rising interest rates is to opt for a fixed rate mortgage. This way, you’ll know how much you’ll be paying for a set amount of time and be shielded from any future increases.

And with many industry experts hinting and more rate rises this year, fixing your mortgage is a very sensible idea. Although, if predictions are wrong and rates fall you won’t benefit.

If you have Savings, try offsetting your mortgage

With rising inflation, it can be almost impossible for taxpayers to make money on a variable rate savings account, especially if they pay higher rate tax.

Rather than keeping your cash in a savings account (which is taxable), by linking it to your mortgage the cash can work to reduce your debt. As most modern mortgages calculate interest on a daily basis, every pound will work to reduce the interest payable on your largest debt, no matter how short a period of time it is in there.

And whilst the money is used to reduce your mortgage debt during the time it is in the account, it can still be withdrawn at any point -- just like traditional savings