As we are all aware the cost of living has been rising dramatically over recent months. This is largely fuelled by the rising cost of household expenditures, most notably food and utilities. To add to this the National Insurance rise from this April means household budgets are being further squeezed.

Whilst we cannot control rising prices in the supermarket or elsewhere, you can take action to control the cost of one of the larger bills that you have, your mortgage payment. Whether that be a Residential Mortgage or a Buy to let Mortgage.

Inflation’s impact

As a result of inflation over the last few months The Bank of England has started to increase its Base Rate. This means that Mortgage rates are already on the rise as lenders have started to pass the base rate increase through to Standard Variable Rate (SVR) customers.

With more rate rises potentially on the cards in the face of high inflation, mortgage borrowers should be ensuring that their existing mortgage rate is best placed to suit their current circumstances

Why a fixed rate mortgage may be a good idea

It’s still a  great time to consider  what  mortgage options are  available to future proof your monthly payments  before any further base rate increases prompt  mortgage rate rises.

Depending on your current circumstances and future plans, a Fixed Rate mortgage can offer financial stability as it provides you with the reassurance that your monthly repayments will remain fixed during the fixed rate period

Possible savings

By reviewing your existing rate and available options, this could potentially mean making savings on a monthly repayment now, along with avoiding further increases in future.  You may also wish to consider extending your fixed rate term to insure against potential rate rises. At the moment, there can be little or no difference between 2 year and 5 year fixed rates.

It may be wise to consider your options now, as by the summer it is likely that borrower affordability will be reduced due to cost of living crisis.

Affordability and rising costs

Lender’s affordability calculators are in part defined by data from the ONS (Office for National Statistics). This data now reflects  the rising costs of living, particularly influenced by the recent removal of the energy price cap  This means that we can expect tighter affordability  criteria for some and lower loan amounts available than previously.

Now is a good time to re-mortgage

The time to act is now, as there will be a lag to any changes in affordability calculators, meaning that changes to rates and lending criteria may possibly come into force in June or July (reflecting ONS data from April / May).  This could reduce people’s maximum borrowing potential, whether that be for purchasing a property or re-mortgaging.

RCCW has locally placed Independent Mortgage Advisers who will be happy to review your existing mortgage deal and advise if you could save money.  To arrange your local appointment please visit or call us on 01224 332400.

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments

Call your Local Office

Aberdeen 01224 332400

Aberdeen Property Office 01224 564636

Banchory 01330 822931

Ellon 01358 720777

Inverurie 01467 629300

Stonehaven 01569 762947