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Martin Lewis issues a ‘ticking time bomb’ warning to homeowners
MARTIN Lewis has issued a warning to homeowners telling them to act fast as mortgage rates rocket.
He described the rates quickly creeping up as a "ticking time bomb" whilst urging anyone coming to the end of theirs, to "prepare in advance".
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It comes as the cost of everything is going up, amid a cost of living crisis.
Energy bills shot up 54% just last month, with more eye-watering costs expected to hit later in the year.
Meanwhile taxes have risen and prices on the supermarket shelves shoot up as inflation hits its highest in YEARS.
Martin took to the telly again last night to quash the concerns consumers had amid the crisis, as he hosted the Martin Lewis Money Show Live.
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But homeowners were interested to know how soaring inflation and more would affect their property ventures.
On the show he was quizzed about what to do about re-fixing your mortgage deal when your current fixed term expires, amid the rising costs.
The money mogul explained that six months ago, you could get mortgage deals below 1%.
But the cheapest fixes are now double that, at 2.1% he revealed.
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Inflation figures hit a 40-year-high when they reached 9% in March, adding pressure to already struggling households and their finances.
And helping push up mortgage rates in a short space of time too.
The Bank of England raised the base of interest to its own 13-year high of 1%, after the warnings that inflation could hit 10% within months too.
It's a move that makes the cost of borrowing, including loans, credit cards and mortgage repayments more expensive.
If you have a fixed rate mortgage deal, then you won't be affected by rate hikes on repayments specifically .
But you may experience a "rate shock" when you next come to remortgage and find cheaper deals are no longer on the market.
That was exactly Martin's biggest concern as he feared for how households would be accepted for affordability checks.
"An affordability check examines 'have you got room to pay this mortgage'," Martin explained.
"Now we are clearly in the midst of a cost of living crisis. So everybody has less room than they did before because other costs have gone up."
Martin said: "You might even want to pay a booking fee to lock in a cheap mortgage in case things get more expensive.
"If it doesn't you can get a cheaper one elsewhere, so it's like an insurance policy so you lose a few hundred quid having locked in a cheap mortgage."
Will Rhind, head of mortgage advice at , said: “With four rate rises already rolled out in under six months we expect that UK homeowners with an existing mortgage will see very different rates when they next remortgage.
"We’re urging all mortgage holders with six months to go until the end of their fixed rate to speak to a free whole of market mortgage broker to explore the options available to them now so that they can start planning ahead during these unsteady times."
The mortgage experts also explained that anyone going for a shorter fix when they next enter a deal, might end up paying more for it over time.
Someone opting for a two year fix might end up remortgaging up to 10 times over the life of the average mortgage.
With a fee to pay each time, this could get costly - up to around £10,000 in arrangement fees alone, according to the experts.
“Homeowners might do better to explore a longer-term fix of 10+ years or more to give themselves protection against further interest rate rises and uncertainty for the duration of their mortgage," Will from Habito said.
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Martin Lewis has also revealed whether you should fix your energy bill now after the latest £2,800 price cap prediction.
And the money guru shared how to get FREE food from the supermarket as costs soar too.
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