I have a mortgage of £85,000 with £20,000ish paid off on a 30 year term (variable rate).
My initial monthly payment was around £330 per month but have been creeping up with interest rates, it’s now going up to almost £430 a month (£50 since the last rise two months ago). I just don’t understand how they can calculate this amount of difference in repayments..
Can anyone explain?!
I’ve been advised to ride with the repayment increases as it’s not a great time to remortgage, any other advice would be appreciated 🙏
In: 1
Interest rates are rising quickly everywhere due to the efforts of central banks to bring down inflation. Essentially, the central bank in the UK is making it more expensive for regular banks to borrow money. In a sense, those regular banks borrowed the money for your house from the central bank, so they’re seeing the exact same kind of squeeze you’re seeing, only they can pass it on to you by raising your rates.
Every bank is getting squeezed like this, so it will be impossible to find a rate like the one you had a few years ago. However, it could be worth it to talk to a competing bank to see if they can offer you better than your current bank. In an era of rising prices, some businesses will try to raise theirs higher than necessary and hope nobody notices, and the best way to police this is with competition.
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