Martin Lewis has warned of a “time bomb” for homeowners, urging them to act quickly to block cheap rates before payments become too expensive.
The Money Saving Expert last night hosted a special special program on ITV to advise the British on how to better manage their finances amid rising food, fuel and energy bills.
He issued a specific warning about fixed-rate mortgages, saying some people could struggle to pay off payments if they don’t get a better deal when their current rate expires.
Mr Lewis said: “If you get to the end of your fare, you have to prepare in advance.”
His comments come just weeks after Bank of England Governor Andrew Bailey announced that key interest rates would rise 0.25 percentage points to 1 per cent in an attempt to cope with rising inflation .
Martin Lewis has urged people to take action before mortgage payments become too expensive
(PA Media)
Rising interest rates increase the cost of borrowing. Homeowners with fixed rate offers that follow the Bank’s interest rates may have to make larger payments.
Lewis said he had some “real worries about mortgages right now.”
He advised homeowners: “You may even want to pay a down payment to block a cheap mortgage in case things get more expensive, and if you don’t, you can get a cheaper one elsewhere, so it’s “like an insurance policy and you lose insurance. a few hundred pounds having closed a cheap mortgage.”
He added: “Now, if you look at the impact on mortgages, six months ago you could get mortgages below one percent, mortgages below one percent, the cheapest solutions are now double. than 2.1 percent.
“So the cost of getting a mortgage is rising. And to be honest, I have some real concerns about mortgages right now. That’s the concern, we’re seeing rates go up, but you also have to remember to get a mortgage. To be accepted, you must pass a credit check and an accessibility check.
“We are now clearly in the midst of a cost-of-living crisis. So everyone has less space than before because other costs have gone up.
“So my big fear is that we will see interest rates go up and fewer people will be accepted when applying for a mortgage because accessibility checks will fail more.
“And that leaves us with a time bomb because most people are in cheap solutions and they will wait to fix it again with the cheap rate and it will be much higher and they may not be able to get them and that is a real problem which is presented “.