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How much would your mortgage rate rise by if you had to fix now?

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How bad would the mortgage crunch be for you? As rates rise rapidly, SIMON LAMBERT on checking the cost if you had to fix now

How bad would the mortgage crunch be for you?

The rapid rise of the Bank of England’s base rate since December has surpassed expectations and I’m having an increasing number of conversations with people who’ve been caught by surprise on their mortgage too.

The Bank is widely expected to raise rates again today, from 1 per cent to 1.25 per cent and they are forecast to keep going up. 

A generation of borrowers are facing a sudden reversal of the situation where typically when they move home or remortgage their rate goes down.

Breaking up the low rates party: Mortgage rates have risen rapidly over recent months and borrowers are finding they are now paying more to remortgage

Breaking up the low rates party: Mortgage rates have risen rapidly over recent months and borrowers are finding they are now paying more to remortgage

Instead, many coming to the end of two or even five-year fixes are finding that they must now pay a higher interest rate to switch to a new deal – and even if they don’t borrow more, their monthly payments are going up.

Early on as rates on new mortgages started to pick themselves up off the floor, this effect wasn’t so pronounced.

But mortgage rate rises have put on a turn of pace in recent months and we are a long way from the best deals on offer last autumn, before base rate began to rise from 0.1 per cent.

Research from This is Money’s partner, mortgage broker L&C, revealed this week that the typical cheapest two-year fix from a basket of ten big lenders has more than trebled from 0.89 per cent in October 2021 to 2.71 per cent now.

The typical cheapest five-year fix on offer has climbed from 1.05 per cent in October to 2.78 per cent now.

As a mark of how quickly rates are rising, in just a month the top two-year fix has risen 0.35 percentage points and the five-year fix has jumped 0.32 percentage points.

It’s worth noting that this is an average taken across the keenest deals on offer, those available for homeowners typically with at least 40 per cent equity in their homes (aka at 60 per cent loan-to-value).

Rates on mortgages for those with smaller deposits or equity are higher.

On the flipside, the good news for those who qualify is that it is possible to beat this average measure slightly: the best five-year fix at 60 per cent loan-to-value is from TSB at 2.54 per cent, while the best two-year fix is at 2.34 per cent.

Nonetheless, the message remains the same: mortgage rates have risen a lot and if your fix runs out this year act now.

With many lenders it is possible to lock in a new fixed rate deal up to six months ahead – and often the trick of adding the arrangement fee to the loan means that there is no upfront cost to do so.

If you do this then the fee is only charged when you take out the mortgage and if you then pay it off, you won’t incur interest on that extra sum for the next couple of decades.

Back to my original question: how bad would the mortgage crunch be for you?

If you had to remortgage now, how much more would you end up paying?

Among other things, the answer depends on the size of your mortgage, when you took out your most recent fix (this influences the then-and-now rate gap) and how much your home has risen in value (this could bump you down to a cheaper LTV bracket).

You can check up on the best mortgage rates you could apply for across different fixed rate lengths with our mortgage finder calculator, powered by L&C.

The answer for many risks being an unpleasant surprise. (I’d need to find another £300 a month, for example.)

But forewarned is forearmed and the worst thing you can do is bury your head in the sand. It’s better to know well in advance how much more you could end up paying and plan ahead.

And don’t forget to factor in when you do the sums that you should have paid off some of your existing mortgage since you took it out.

Read our guide on how to remortgage and find the best rate to find out what you need to know.

PS. As a final aside, it’s not shown up in the figures yet, but this is surely going to put a dent in the rampant house price inflation we’ve seen in the pandemic. I moved home in July 2020, fixing for five years at 1.4 per cent, the best rate for the same amount now would be 2.69 per cent.

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Bluewater grows its entertainment offer (GB)

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Landsec has announced the opening of a third ‘UK first’ attraction at Bluewater, Kent as the destination expands its partnership with Hangloose Adventures. Skydive, a free-fall experience not found anywhere else in Europe, and the UK’s only outdoor skydive machine has opened at the centre. It follows on from Europe’s biggest purpose-built giant swing, standing at 46-metre tall, which opened at Bluewater earlier this month.  

 

The announcement builds on a successful first year for Hangloose’s initial attraction Skywire, the longest zip wire in England, which has welcomed 30,000 guests since launching at Bluewater last June. Landsec will continue to work with Hangloose to expand its offering, with up to five more experiences set to open at the centre by 2024: a bungee tower, giant slide, clip and climb, waterdrop boulding wall, and Via Ferrata, a route-marked climb using metal rails and rungs embedded in Bluewater’s cliff walls.

 

Mark Warne, Brand Account Director F&B and Leisure at Landsec commented: “Delivering new experiences which are unique to Bluewater is central to our overall offer for guests. Hangloose’s innovative concept raises the bar when it comes to leisure attractions and draws guests from across the UK to Kent. By partnering with Hangloose to grow their business and create shared value, we’ll be able to give guests even more exciting experiences every time they visit.”

 

Brian Phelps, MD of Hangloose Adventure, said: “Since the beginning, we’ve worked closely with Landsec to grow our leisure concept and drive performance, putting us in a unique position where we’re able to expand our offer after only a year. We’ve enjoyed great success at Bluewater so far and are already thinking about how we can provide even bigger and better experiences in the future.”

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Author with immaculate house offers ten tips for a clean home

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Is this the secret to NEVER having to clean? Houseproud author claims she saves hours by sticking to a ten-step mantra – including banning chairs in bedrooms, wiping as you cook and only ironing shirts and dresses

  • UK writer Natali Juste Simmonds says she’s cracked keeping a home clean, by sticking to a few simple ground rules – and making sure family members comply
  • She shared top ten tips for keeping a home spotless with her 20,000 followers
  • Among them are ditching a toilet brush in the bathroom, not having a chair in the bedroom and cleaning  the kitchen while you cook

A houseproud author has revealed her ten essential tips for keeping a house spotless – saying simple ground rules for family members and cleaning as you go means never wasting time on dull chores. 

Writer Natali Juste Simmonds, who was born in the UK but now lives in the Netherlands, penned her top ways to keep on top of cleaning on Twitter, saying she has time to focus on her writing because she follows her own advice about dodging ‘thankless’ cleaning tasks. 

The author of a series of paranormal romance novels told her 20,000 followers on Twitter: ‘I know so many people who spend hours cleaning up after their family every day, but I refuse to. 

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UK writer Natali Juste Simmonds says she's cracked keeping a home clean, by sticking to a few simple ground rules - and making sure family members comply

UK writer Natali Juste Simmonds says she’s cracked keeping a home clean, by sticking to a few simple ground rules – and making sure family members comply

‘It’s boring and thankless. I prefer to write. Yet my house is spotless. Here are 10 ways to keep on top of s*** so you don’t have to clean for hours.’ 

Sharing her ‘tough love’ mantra, she said that the key to keeping a home clean is making sure every family member is engaged, saying learning how to tidy is a lifeskill that everyone needs – and no-one should get away with not doing it. 

Natali wrote: ‘Train everyone in the house to do the following (cats are the exception). After a while these habits will become routine, but you MUST stick to them and make sure no one is let off the hook.’ 

Among the tips are filling a bag with things that are in the wrong place at the end of every day and placing them back where they belong. 

Tidy home, tidy mind: The Netherlands-based writer shared her top ten tips for keeping a home spotless with her 20,000 followers on Twitter - saying that making sure everyone in the house pulls their weight is key (Pictured: An office area in Simmonds' home)

Tidy home, tidy mind: The Netherlands-based writer shared her top ten tips for keeping a home spotless with her 20,000 followers on Twitter – saying that making sure everyone in the house pulls their weight is key (Pictured: An office area in Simmonds’ home)

The writer also claims having a toilet brush doesn’t help keep a loo clean and dousing it with bleach instead is a more reliable way to ensure it’s sparkling. 

And getting used to wiping down mirrors after using a sink also helps, she claims, writing: ‘Keep a dry cloth next to the bathroom sink. Every time someone uses the taps or brushes their teeth, wipe down the counter and mirror. Takes literally 2 seconds. No cleaning toothpaste stains off counters.’

Teaching kids to pull their weight around the house is key to success, and equality reigns supreme in the Simmonds house. 

Among her top tips are ditching a toilet brush in the bathroom - using just bleach instead; not having a chair in the bedroom - to prevent people leaving clothes on them - and cleaning the kitchen while you cook (Pictured: Simmonds' very tidy office)

Among her top tips are ditching a toilet brush in the bathroom – using just bleach instead; not having a chair in the bedroom – to prevent people leaving clothes on them – and cleaning the kitchen while you cook (Pictured: Simmonds’ very tidy office)

‘If one kid lays the table, the other clears. If one hangs out the washing, the other collects. I don’t say “I need help with dinner” I say “who will chop the veg and who will wash up?” Its called a presumed close. I have no option, why should others in my house?’

The author, who has written books including the Indigo Chronicles trilogy and the Blood Web series, admits that having a cleaner is still useful…because they can help keep on top of areas where grime quickly builds, including fridges and ovens – but she suggests ditching a takeaway a week to cover the cost. 

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DIA Group closes 25 Minipreco stores in Portugal

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DIA Group has closed 25 Minipreco stores in Portugal, resulting in the loss of approximately 159 jobs. The retailer said the closures are the result of ‘the effort to adapt, modernise and balance the operations of DIA Portugal, with the aim of better preparing the company for current and future challenges arising from the current economic situation in the country,’ according to media reports. In the last two years, the multinational company operating in Spain, Portugal, Brazil, and Argentina, accumulated losses of over €620m.

 

In Portugal, net sales reached €283.1m in the first half, 4.5% below the €296.3m generated in the same period last year, due to the reduction of stores and mobility restrictions. DIA Group confirmed its intention to continue to invest in Portugal. The company hopes to adjust its operation to the current reality in order to ensure the future success of the company.

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