2016 mortgage applicants are warned to watch out for rising rates.
Interest rates are not predicted to rise quite yet, which many would-be buyers are taking as a sign that mortgage rates will not rise either.
However this might not be the case, and those looking for a 2016 mortgage are being advised to act sooner rather than later.
Why the urgency to lock into a cheap deal now?
Experts are predicting that mortgage rates are going to rise sooner than expected. This is before the bank rate shifts, and is because recent banking stress tests have resulted in banks being told to keep more in reserves. Stress tests carried out to show that banks would be capable of withstanding another financial crisis have led to this rule change.
From March next year lenders will have to increase their reserves to hold an additional 1% of the value of their assets. This means money will need to be raised quickly, and the most probable way this will happen is via a mortgage rate hike.
It’s not just this which may cause rates to rise, in addition the US is forecast to increase its base rate before the end of the year.
If you are looking for a mortgage for 2016 you could search the market now and accept a competitive offer which would remain valid for a few months.
If you would like to find out what mortgages are available at your deposit level call a Deal Direct adviser now.
We offer impartial advice and a ‘whole of market’ search to find you the most competitive deal for your circumstances.
Call 0800 048 8828 for 2016 mortgage advice.
