OUR brand new mortgage calculator will tell you how high your repayments will be on your home.
Interest rates have soared as the war in the Middle East has caused global instability and raised fears of high inflation.
It means up to 1.3million homeowners are facing shock mortgage bills as remortgage rates from the top 10 lenders climbed from 3.77% to 5.01% on Wednesday.
This adds around £140 extra a month – working out at £1,680 a year – to a typical £200,000 mortgage over 25 years.
The hardest-hit will be households rolling off five-year deals, with those homes expecting average repayments to rise by between £417 to £444 per month.
The situation is also tough for first-time buyers as some lenders have pulled low-deposit deals as risks have increased for them.
The average two-year fixed-rate mortgage is currently sitting at 4.53%, according to Uswitch.
The average five-year fix is at 4.96%.
Experts believe mortgage rates could go higher still, although it depends on the outcome of the war.
David Hollingworth, associate director at broker L&C, said: “There are still a number of deals below 5% but the lowest rates are increasingly edging nearer to and beyond 5%, especially for shorter term two-year rates.”
He predicts that if rates continue to rise like they have over the last month, the best rates will be around 5 to 5.5% with some deals pushing beyond 6%.
If you’re coming up to remortgage or buying a home, you should start looking early for deals – remember that you can usually switch to a better deal if it comes up before you complete.
How to get the best deal on your mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
