This comes after the predicted news that the Bank of England are to increase their interest rates from 0.1 percent 0.25 percent tomorrow as the Monetary Policy Committee will make an announcement. On the Ask Martin segment on Nihal Arthanayake’s BBC Radio 5 Live programme this afternoon, he issued warning to listeners to try and get better deals.
If the interest rate does rise tomorrow, the money saving expert explained he would expect to see a “kickstart” in mortgage rates increasing for those just starting out, or those who are re mortgaging.
He said: “My clarion call to everybody with a mortgage is check now if your existing deal is as good as it can get.
“That applies double if you’re languishing on the standard variable rate.
“I’m not saying you will be able to save, or that your mortgage isn’t the best you can get.
READ MORE: Interest rates rise set to put a further ‘squeeze’ on families
“What I’m saying its worth investing your time now, today, at checking to see if it’s the best that you can get.”
As an example of the amount of money people could be saving if they are able to switch to cheaper deals, Mr Lewis read out a listener’s tweet.
Louise tweeted that she was able to save £2,700 a year by switching mortgage deals after following Mr Lewis’ advice to check around.
Her mortgage was £476 a month, however once she checked around, she was able to end up fixing her mortgage for five years at 1.62 percent.
Her monthly payments went down to £248.
The money saving expert added: “That is the scale of magnitude of savings we are talking.
“What Louise can choose to do now is overpay the extra £200 a month she was paying and get rid of her mortgage 10 years or so earlier.
“Looking and checking your mortgage now is a very good use of time.
Barclays, HSBC, NatWest and TSB are just some of the lenders to increase mortgage rates in anticipation of a base rate hike and the typical borrower could pay almost £400 a year more as a result.
Two-year fixes at 80 per cent LTV have “soared” by a quarter in days, from 1.24 per cent to 1.64 per cent, said Katie Brain, consumer banking expert at Defaqto.
This is bad news for borrowers after years of record low rates, but she added: “Interest rates are still low and there are some great deals to be had.”
Mortgage brokers are urging borrowers to lock into fixed-rate mortgages to protect themselves as inflation drives borrowing costs higher.