Wednesday 6 September 2023

South London Buy-to-Let Investors: Secure a New Mortgage Rate Now

 The Bank of England is expected to raise the base rate again in September, which could mean higher mortgage payments for buy to let investors in South London.

Gavin Richardson, the managing director of Mortgages for Business, is urging investors to secure a new mortgage rate as early as possible, even six months in advance.

"I think inflation will fall as low as five per cent in the final quarter of this year," he says. "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 England] 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."

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. Richardson concludes: "As long as inflation continues the same downward trajectory though, we forecast the next rise will be the final increase this year."

If you are a buy to let investor in South London, it is important to act now to secure a new mortgage rate. The sooner you act, the more likely you are to get a good deal. A mortgage broker can help you compare rates and find the best deal for your needs.

Here are some tips for securing a new mortgage rate:

  • Start the process early. The sooner you start, the more time you will have to shop around and compare rates.
  • Get quotes from multiple lenders. Don't just rely on one lender's offer. Get quotes from at least three different lenders to see who can offer you the best deal.
  • Be prepared to switch lenders. If you are not happy with your current lender's offer, be prepared to switch to a new lender.
  • Consider a fixed-rate mortgage. A fixed-rate mortgage will protect you from interest rate increases for a set period of time.

If you are interested in knowing more or you are curious as to what your rental property is worth today drop me a line and pick my brains or use my free online valuation tool to get a ballpark figure!

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