Brokers ‘frantic’ after BoE rate rise as borrowers worry over mortgage costs – 9th May 2022

Brokers have been inundated with enquiries from panicking borrowers trying to lock in to the best deals after the Bank of England (BoE) raised interest rates.

Monetary policy makers pushed the base rate up to one per cent last week in a bid to temper inflation.

Lenders have been quick to react, with mortgage rates increasing and expected to climb higher still.

The average two-year fixed rate has now breached three per cent for the first time in seven years, according to Moneyfacts.

It’s not just clients coming to the end of fixed-rate periods, many borrowers are actively looking to exit their current fixes to grab a deal now, according to Dean Esnard, director at Magni Finance.

He said: “We have seen a huge spike in people looking to remortgage six months before their fixed rate ends. Normally, the majority of borrowers would wait until they are within the last three to four months of their deal and do a simple product transfer.

“However, with rates increasing so quickly, remortgaging before rates increase again can save them thousands of pounds every year.”

Esnard has recently had a client pay a £5,000 early redemption fee to exit a two-year fixed rate in order to lock in a new five-year fixed rate.

He said people are “worried how high rates will be when their current fixed rate expires”.

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