Confused about what the rise in interest actually means? Don't panic, because the Your Home team has debunked the jardon and is here to help.
Following the first increase in the Bank of England’s base rate in over 10 years, we’ve teamed up with MoneySuperMarket’s expert Sally Francis to put together some exclusive guidance for all our readers who might be affected.
You may ask, how will the interest rate affect me?
The simple answer is through your mortgage.
Though credit cards and loans will also be affected, the people most affected will be homeowners. In particular, those with variable mortgages will probably experience higher monthly repayments, so here are MoneySuperMarket’s top tips to keep the bills down:
1. Cheaper mortgage
If you’re on a variable rate mortgage, you can switch to a cheaper deal. However, be careful of any hidden fees and charges that may be incurred. Work out whether the different rate is really going to save you money once the charges have been added.
2. Offset option
Ask your lender about ‘offsetting’ your mortgage. This is where your savings and current account are stacked up against what you owe, and you’re only charged interest on the balance. Mortgage = £200,000 - £15,000 of savings = You pay interest on £185,000.
3. Switch energy
If you’ve never switched provider or haven’t done so for several years, you’re probably on a standard variable rate tariff. Switching to a fixed rate deal could save you hundreds of pounds a year. Head to a comparison site, such as moneysupermarket.co.uk, to see how much you could save.
4. Don’t auto renew
Car and home insurers love it when you renew with them. But instead of rewarding your loyalty they often punish you with a price hike. So be a new customer every year and get the best deal in the market. Don’t be afraid to call up your supplier and haggle on the phone, too. The deals are out there, sometimes all you have to do is ask!
5. Max your bank account
Been with the same bank for years? There’s a new breed of current account that pays interest or gives rewards for certain types of spending. Plus, you might get a £100+ cash incentive to switch!
To find out more information, head to Moneysupermarket.co.uk.