Specialist buy-to-let broker Mortgages For Business (MFB) has urged landlords approaching re-mortgage to secure a new rate as early as possible following the latest update on inflation.
The ONS Consumer Price Index showed that inflation reached 6.8% in July, down from 7.9% in June, and although inflation is likely to fall to as low as 5% in the final quarter of the year, the Bank of England is expected to increase the base rate in September, probably by a further 0.25%, explains MFB MD Gavin Richardson (main picture).
“I recommend securing a new rate as early as possible,” says Richardson. “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.
“Either way, you’ll have financial security and confidence that you’re on the most suitable mortgage for your circumstances.”
Before 21st September Those landlords on a tracker or variable mortgage that follows the base rate have time to secure a fixed-rate deal before the next Monetary Policy Committee meeting on 21st September.
“If you wait, you will see your mortgage repayments increase once again following the base rate rise,” he adds. “It’s worth exploring your fixed-rate options with a broker to see how much you could save on your monthly payments.”
MFB believes the latest inflation figures will act as a barometer for the MPC, which has increased the base rate 14 consecutive times, rising from an all-time low of 0.1% in December 2021 to 5.25% following this month’s increase.
Richardson adds: “As long as inflation continues the same downward trajectory though, we forecast the next rise will be the final increase this year.”
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