Don't panic - but shop around

Homeowners are being urged not to panic after the Bank of England raised interest rates to their highest levels in 13 years this week.

Financial services company Q Financial Services, which has offices in Wellington and Shrewsbury, says that whilst Thursday’s increase to one per cent is another blow to homeowners hit by the cost of living crisis, there are steps they can take to minimise its impact.

Q director of operations Stuart Mackintosh said there were still attractive mortgage deals on the market and that fixed-term packages now made more sense than ever.

He was speaking after today’s 0.25 per cent increase in the base rate as the Bank of England attempts to hold back soaring inflation and sharp increases in the cost of living.

“This is the fourth increase in the base rate in recent months and coming against the backdrop of the cost of living crisis, homeowners are bound to be feeling more anxious about their mortgages than has been the case for some time.

“But it is important to remember that even after today’s increase, interest rates remain at historically low levels and the indications are the Bank of England will want to keep them that way.

“However, if your mortgage is due for renewal – or you can switch provider without penalties – now is a really good time to start considering your options. This is definitely not the time to just accept the first offer your existing provider makes, but to start shopping around.

“We know from our own experience that homeowners can make substantial savings by getting some expert advice and switching to mortgages better suited to their needs. And by switching to a fixed rate deal, you can guarantee your payments over the course of the term which in turn helps with the rest of the household budgeting.

“There are some really good deals still to be had – often from lesser-known but highly respectable lenders – but you are only likely to find them by seeking help from people who know what to look for.”