The latest inflation figures and the cost of living crisis has been all over the news in recent weeks and months with the the most recent rise in inflation at 5.5%, which is a 30 year high.
There has of course, been a number of factors that influence such a rise. You may recall the petrol and diesel shortages towards the end of 2021. While this was a relatively short lived shortage, fuel prices hit a record level. Since then fuel costs have reduced slightly but are still significantly higher than previous to the shortages.
Other factors include higher clothing costs and the currently booming second hand car market.
Most economists expect inflation to fall in the second half of the year after reaching a peak above 7% in April, when the energy regulator Ofgem will raise the cap on energy bills which has been the latest contributing factor.
The rise in the cap will add more than £600 to annual bills but could be increased again in October unless the cost of gas and petrol on international markets drops as expected in the summer.
How does this impact your mortgage –
While the cost of living crisis may not directly impact your mortgage as such it has never been more important to make sure your mortgage is in good standing and your monthly payments are as low as they can be. With household bills increasing it may be possible to offset some of these increases by making sure you are on the best rate available to you.
In recent months we have also seen the increase of the Bank of England base rate which has in turn started to impact overall mortgage lending rates. While the overall lending rates remain low at the moment it would be expected to see these increase again through 2022 with rates expected to rise further this year.
An estimated 46% of homeowners are still on the Standard Variable Rate (SVR) which for most will mean paying a significantly higher rate of interest anyway. Not only will someone on the SVR be paying more on their mortgage now, they will also be valunarable to further BoE base rate increases. With the possibility of increased rates and the rise in household bills on the horizon the importance at looking at your options cannot be understated.
We are looking to help as many homeowners as we possibly can, that is why we are offering all clients a free mortgage review. Get in touch with us to find out more.