The Cost of Living Crisis VS Your Mortgage

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On 21 September 2022, the Bank of England base rate increased to 2.25%. This is good news for those with savings accounts as it means their interest rates are also likely to increase, paying more interest on their money. For those with mortgages however, this news might not be so welcome.

The cost of living crisis is a topic that we hear a lot about when we’re visiting properties and providing valuations; and this rate change will likely adversely impact many in our communities. One area you can likely make a saving is on your mortgage.

As estate agents, it’s our duty of care to enquire in to our sellers financial situations and it never ceases to surprise us how many homeowners are unsure what mortgage product/interest rate they have. We’ve met many homeowners who have previously signed up to fixed-term mortgage deals and when the fixed-term has lapsed, they’ve forgotten all about revising their product and getting a better deal.

Does this sound like you?

We’re all very good at reviewing our insurances, broadband and tv packages, and mobile deals; but when it comes to our largest asset it seems we forget the importance of having our finances reviewed.

What is the Bank of England (BoE) base rate?

The Bank of England base rate is usually voted on by the MPC eight times a year.

If the MPC feels that the economy would benefit from higher borrowing and spending by businesses and consumers, it lowers the base rate.

On the other hand, if spending levels are increasing too quickly and inflation is in danger of soaring, the MPC may raise the base rate.

How will it affect my mortgage?

When a fixed-term mortgage deal ends, borrowers are moved to their lenders standard variable rate (SVR). If you’re on your lender’s SVR, then a rate increase could significantly bump up your costs. While your lender might not increase its SVR by the full amount, it’s still highly likely that your payments will increase.

With average SVRs above 5%, it’s important to remortgage to another deal before the end of your fixed term.

Now is the best time to review your products.

Be like Mr & Mrs S

We asked one of our highly recommended and respected Independent Mortgage Adviser’s from Your Mortgage Centre to provide us with an example of someone they’ve recently helped out of a standard variable rate mortgage.

“Mr & Mrs S had been paying their lenders standard variable rate for several years. Their mortgage had been affordable, so they had not considered the fact that fixing in to a new deal could save them money. They’ve received several letters from their current lender already this year stating that their mortgage payments were to increase following the Bank of England’s base rate rise, so contacted us to explore their options.

Their lenders standard variable rate had increased to 5.24% and they were concerned that this could keep increasing over time. They felt that in the current economic climate, having the certainty of knowing their mortgage payments over the next few years was most important to them. We managed to find them a fixed rate mortgage which has reduced their monthly mortgage payments by £133 a month and more importantly, provided them with the peace of mind that their mortgage payments will remain the same for the next 5 years.”

Be like Mr & Mrs S. Know what mortgage product you’re on and be sure to regularly have it reviewed by an Independent Adviser to ensure you’re not paying above the odds.

Whether you’re moving or simply re-mortgaging, Sims Williams have access to highly recommended independent mortgage advisers, who’s advice and service is totally free of charge. Contact us on 01243 551368 .

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What our clients say

EXCELLENT SERVICE

From first contact to completion of sale and also finding me a rental property service was excellent. I found the staff to be personable, efficient and courteous.
Vendor - Jan 20th, 2021

EXCELLENT SERVICE

Richard was completely professional yet friendly and kept us informed every step of the way. Nothing was ever too much trouble and he made a protracted transaction far less stressful than it could have been. Thoroughly recommend him and the company.
Fay - Vendor - Dec 7th, 2021

Excellent

I have recently rented my property through Sims Williams and I was impressed from day one. They were professional, kept me updated throughout the process and took away the stress!!
Lindsay - Landlord - Dec 1st, 2021

Helpful, Efficient & Friendly

Thank you all so much for you all your help and support in selling 18 Green Lane for us, you’ve all been so helpful, quick to respond, friendly and well you sold it really quickly! I have already recommended you to a number of friends and will continue to do so, my parents bought from you over 20 years ago and you have continued to be fantastic.
Julia - Vendor - Jun 18th, 2021

Fantastic service, extremely helpful staff

Fantastic team, David has been most helpful since the beginning with securing the tenancy, walking us through the process and answering all of our questions. He made sure our moving-in was as smooth as possible even though we were running late.
Francesca and Adam - Apr 9th, 2022

One Word - Fantastic.

We don’t normally write reviews, but on this occasion we had too. In life you get what you pay for, whilst I’m sure that there are cheaper agents out there; if you want a stress free move with knowledgeable, friendly and dedicated agents, that give excellent communication, then look no further than Sims Williams. We dealt with John, Annie and Vanessa, we sold and purchased through them. The Team in the Bognor Branch is fantastic, we couldn’t of hoped for better agents to support us through the journey which wasn’t always the easiest but they communicated to either side of the chain fantastically, keeping stress to a minimum and helped us through the bumps to complete in 11 weeks. A big thank you to you all, and in the future we wouldn’t look anywhere else. Sam and Lisa.
Mr & Mrs Poston - Dec 7th, 2021

A Really Good Close Working Relationship

Thanks to their unrivalled local knowledge, Sims Williams were able to advise me from an early stage on the most appropriate house styles and sizes for the development. Their marketing of the properties was an excellent balance between online and personal service and exchanging contracts on the final property was the culmination of a really good close working relationship.
Andrew Wilson – Owner Wilson-House Ltd -

HOUSE SALE

The service I had from the staff in Sims Williams Walberton office was exceptional. They guided me through the whole process from preparing the house for marketing to concluding the sale. A very smooth, quick and trouble-free sale. Thank you to everyone involved.
Bill H - Vendor - Sep 14th, 2020

Swift Dealings

Good experience, swift response and support when I needed landlord to reconsider decision. Happy with the service would fully recommend.
Claire - Tenant - Apr 26th, 2021

MY RENTAL EXPERIENCE

Really helpful and efficient. Nothing too much trouble. Excellent service. David Vawdrey is highly efficient and charming to deal with. thank you
Flora - Tenant - Jul 13th, 2020