BROKERS have urged anyone in the process of remortgaging or buying to lock into a mortgage rate before Wednesday’s Budget “just in case the wheels come off and mortgage rates spike”. They say you can always switch onto another better rate if rates do come down following this week’s big fiscal event.
Omer Mehmet, Managing Director at Welling-based Trinity Finance, warned that the Budget could wreak havoc with mortgage rates: “Based on the frenzied build-up and the state of the public finances, this Budget has the potential to wreak havoc with the markets and the SONIA swap rates that underpin fixed rate mortgage pricing.
“If you’re looking to remortgage or buy, now may be the time to lock into a rate just in case rates start to rise, potentially quickly, in the days following the Budget. If rates drop, you can always move onto a lower rate. Essentially, hedge your bets wherever possible.”
Savvy borrowers will act before the Budget
Andrew Montlake, CEO at London-based Coreco, agreed: “Savvy borrowers currently looking to remortgage or buy will lock into a mortgage rate before the Budget just in case the wheels come off and mortgage rates spike.
“If lenders and the markets don’t like what they see, rates, which have been edging down over the past month or so, could go into reverse very quickly.
“Budget week can be a surreal week for the property market, as one radical announcement around Stamp Duty, for example, can change the dynamic almost instantly. Demand for property could soar or vaporise, that’s how big this is.”
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, also urged borrowers to put themselves into the best possible position ahead of the Budget: “This is shaping up to be one of the biggest Budgets for a long time and people currently in the market for a mortgage or remortgage need to put themselves into a position where they get the best possible rate.
“Speak to a good broker and lock into a rate before Wednesday if you can. That way, if rates do spiral upwards after the Budget, you are protected. Equally, if mortgage rates come down after the Budget, for whatever reason, you can always switch from the rate you locked into onto another better rate.”
Market turmoil guaranteed
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said market turmoil was all but guaranteed and urged people to speak to their broker: “It’s definitely the right time to be securing a new deal for your mortgage, as it’s inevitable that the Budget will send the markets into a spiral.
“For those swapping deals with your current lender, most will let you book a new deal up to four months in advance, or you can secure a deal up to six months early via a remortgage.
“If rates do improve at a later date, then it is easy to make further changes. Tap into the knowledge of your mortgage broker for the widest choice of options.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, said borrowers should brace for impact: “The Budget has been hurtling toward us like an asteroid in a sci-fi movie, and the rumours about what’s planned have changed so many times that all we can do now is brace for impact.
“Borrowers looking for a new mortgage deal should aim to lock one in this week as any delay could limit your options once the markets react to whatever Rachel Reeves announces.
“Remember, rates can still be reviewed and adjusted up until completion.”
Photo by Muhammad Zaqy Al Fattah on Unsplash
