The Bank of England has raised interest rates six times since December 2021, meaning that the base rate increased from 0.1% to 1.75%. The Monetary Policy Committee is anticipated to raise rates by 0.75 percentage points to 2.5% on Thursday, September 22.
According to a study by Butterfield Mortgages, 44% of mortgage clients claimed they are more concerned about rising interest rates than inflation. Similar numbers (42%) indicated they were thinking about transferring to another mortgage provider with a lengthier fixed-term mortgage.
While more than a quarter (27%) are actively looking for a new mortgage, more than half of UK mortgage customers (53%) arel tied in with their existing mortgage provider.
The report also found a need for lenders to offer more assistance in navigating the present economic environment. Less than half (45%) of those surveyed think their mortgage company has shown initiative in offering advice or communicating the effects of increased interest rates.
Butterfield Mortgages’ CEO, Alpa Bhakta, stated: ‘Borrowers are dealing with significant changes in the economic environment. Our study has demonstrated the impact that the Bank of England's six straight interest rate increases have had on mortgage payments and people's broader financial concerns. As lenders, we must use every effort to guide mortgage customers toward the most advantageous financial course among these growing difficulties. This entails being proactive in anticipating the changing demands of borrowers and providing more flexibility with long-term, fixed rates, which might provide borrowers with a sense of security in the possibly turbulent times to come.’