Buy to Let investors about to remortgage are being urged to secure a new rate as early as possible – even six months in advance.
Gavin Richardson, the managing director of Mortgages for Business, says: “I think inflation will fall as low as five per cent in the final quarter of this year. But the Bank of England is still going to increase the Base Rate in September — probably by a further 0.25 per cent.
“So if you’re approaching remortgage, while I expect inflation to ease, I recommend securing a new rate as early as possible.
“For some lenders, this can be up to six months before the end of your Early Repayment Charge period. If mortgage interest rates decrease, many lenders allow you to switch to a more competitive product should one become available before you complete.
“If you are on a tracker or variable mortgage that follows the Base Rate, you have time to secure a fixed-rate deal before the next [Bank of Ireland] meeting.
“If you wait, you will see your mortgage repayments increase once again following the Base Rate rise. It’s worth exploring your fixed-rate options with a broker to see how much you could save on your monthly payments.”
Earlier this month the government announced the Consumer Price Index inflation rate was 6.8 per cent in July, down from 7.9 per cent in June.
Inflation peaked last October, around the time of the failed Truss-Kwarteng mini-budget, at 11.1 per cent.
The Bank of England next meets on September 21 to discuss base rate and Richardson concludes: “As long as inflation continues the same downward trajectory though, we forecast the next rise will be the final increase this year.”
