A NEW starter scheme offers mortgages with an interest rate below 1%.

The Own New’s Rate Reducer mortgage offers buyers of new construction a reduction in mortgage interest when they purchase a home from several major home builders.

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These include Barratt Homes, Barratt London, David Wilson Homes, Persimmon, Taylor Wimpey, Bellway and Berkeley Homes

The scheme, which started in February 2024, gives home buyers access to a very low mortgage interest rate during the initial term of their mortgage.

Own New Rate Reducer works by using incentive budgets that home builders offer to their customers to reduce their monthly mortgage payments over a fixed term.

For example, if the homebuilder offers a 5% incentive on a home, Own New Rate Reducer takes this amount and applies it directly to the mortgage interest to reduce monthly payments.

Depending on their lender’s criteria, buyers can choose to spread the benefit over the first two or five years.

For example, Virgin Money, one of the first lenders to join Own New’s Rate Reducer, says that for a new home worth £300,000 the introductory 2 year mortgage rate of 4.79% with a £995 fee at an LTV will be 65%. reduced to 0.99% at 60% LTV with a £495 fee.

But remember: to get this rate, you need a 40% deposit.

Halifax, Lenders Gen H, Furness Building Society and Perenna also offer discounted introductory mortgages through the scheme.

In addition to saving on monthly costs during that period, the customer also pays more on the capital value of his mortgage, because the interest charged on the loan is lower.

Lenders will still carry out their usual affordability assessment to check whether the buyer can afford repayments if interest rates rise once the fixed term benefit expires.

To access this scheme, independent financial advice must be obtained from a regulated mortgage broker who has completed additional training.

Commenting on its own new Rate Reducer product, David Hollingworth, Associate Director at L&C Mortgages, said: “Buyers will no doubt have put their plans on hold due to higher mortgage rates, which has pushed up their monthly payments.

“This product aims to address these concerns by taking advantage of the developer’s incentive to lower mortgage rates.

This will help address one of the key barriers for many and give buyers more breathing room on their monthly payments.

‘Borrowers will need to meet lenders’ affordability tests as normal, but it will also be important for them to plan ahead.

“Once the deal ends, it’s likely that rates will still be higher and payments will increase.

However, buyers will know this along the way and can therefore work to make provisions for an increase in payments in the future.”

How does the scheme work in practice?

With the Own New Rate Reduced scheme, you buy a new-build home with a mortgage and pay a lower mortgage interest than when you buy on the open market with a traditional mortgage.

When you choose your property, the developer agrees to contribute 3% or 5% of the purchase price.

The mortgage lender will then offset the 3% or 5% developer contribution against the mortgage interest to reduce your monthly payments for the first two or five years, depending on the length of your initial term.

Barratts Homes says mortgage rates below 1.89% will be available through the Own New Rate Reducer program in spring 2024, assuming a 5% incentive for housebuilders, with an initial period of two years and an LTV of 75%.

For comparison, on the open market in spring 2024 the best two-year fix at an LTV of 75% is 4.42%.

So if you take out a $180,000 mortgage over 25 years at 1.89% through the Rate Reducer program, your mortgage payments for the first two years will be $754 per month.

This is €238 per month less than if you took out the best two-year fixed rate with an interest rate of 4.42%, leaving you with an annual saving of €2,856.

Who is eligible and how do I apply?

The scheme is open to those who buy a new-build home and who:

• Are a first time buyer
• Are a house mover
• Have owned real estate in the past

To purchase a home through the Own New scheme, visit www.ownnew.co.uk.

Here you can find an eligible property from a developer who has signed up for the scheme.

You should then discuss your mortgage options with a recognized Eigen Nieuw mortgage broker, such as our partner free mortgage broker L&C.

Once you have agreed, you will continue with the purchasing process of the new construction as normal.

What are the advantages and disadvantages of the scheme?

The main advantage of this mortgage arrangement is that it results in significantly lower monthly mortgage costs for a fixed period.

As a knock-on effect of paying lower rates, the homeowner will also pay off more of their property’s capital.

But once your introductory period ends, you should be prepared for mortgage rates to rise.

You also get a more limited choice of properties eligible for the scheme, and you may not get the nominal 0.99% rate if you can’t afford a 40% deposit.

Other starter schemes where you need a small or no down payment

Several major banks and building societies allow first-time buyers to borrow the full amount needed to purchase their home.

These deals are often called 100% loan-to-value mortgages because you don’t need a down payment to purchase.

Last year Skipton Building Society launched its Track Record 100% mortgage available to tenants buying their first ever property.

The only catch is that the amount you can borrow has a limit, because your monthly repayment cannot be more than what you currently pay in rent.

Real estate developer Fairview recently launched its Save to Buy program.

This allows starters to save for their final deposit after their move.

Buyers pay a fixed amount monthly into a Fairview piggy bank instead of rent.

You only need a 1% deposit to get started and when you’ve built up enough equity, you can apply for a mortgage to buy your home.

Thanks to the Right to Buy scheme, tenants of social housing can buy the home they rent with a discount of up to 70%.

You get a 35% discount on your social housing if you have been a tenant in the public sector for three to five years.

The right to purchase is similar to the right to purchase, but offers people who rent from a housing association or another public sector landlord the opportunity to buy their home.

It is open to anyone renting in the public sector for three years or more and offers a discount of £9,000 to £16,000 on the purchase price.

How much you get depends on the location of the home.

MILLIONS of households will breathe a sigh of relief after the Bank of England left interest rates unchanged again today.

The decision-makers at the Bank’s Monetary Policy Committee (MPC) have now kept interest rates at 5.25% for the fifth time in a row.

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Banks and lenders use the Bank of England’s (BoE) base rate to set the interest rates it offers customers on mortgages, loans and savings.

BoE Governor Andrew Bailey said: ‘In recent weeks we have seen further encouraging signs that inflation is easing.

‘We have again kept interest rates at 5.25% today because we need to be sure that inflation falls back to our target of 2% and stays there.

“We are not yet at the point where we can lower interest rates, but things are moving in the right direction.”

At the last meeting, the MPC voted by a majority of 8 to 1 to maintain the bank rate at 5.25%.

One member preferred to reduce the bank rate by 0.25 percentage points to 5%.

It comes just a day after the CPI measure of inflation fell to 3.4% last month – down from 4% in January and the lowest since September 2021.

Most economists had expected interest rates to be 3.5%.

It means inflation is now closer to the BoE’s 2% target.

Inflation is a measure of how much the prices of everyday goods such as food and clothing, and services such as train tickets and haircuts, are now compared to a year earlier.

Economists generally agree that interest rate cuts will happen later this year.

And the Bank has indicated at recent meetings that cuts are likely in the future.

It would reverse a four-year trend of raising rates or leaving them unchanged at each Bank meeting.

An interest rate cut is expected to reduce mortgage costs for millions of households.

This comes after bank interest rates rose from an all-time low of 0.1% in December 2021.

It was increased to tackle rising inflation.

High interest rates are intended to dampen demand and spending, thereby reducing inflation.

Since September, the bank rate has been held at 5.25% as inflation has declined, easing the burden on mortgage holders.

We explain below what exactly a new rate pause means for your finances.

What does it mean for my mortgage?

When interest rates rise, it usually means that your mortgage costs will increase, depending on the type you have.

Those with fixed rates are usually safe until they remortgage.

However, other mortgages, such as tracker mortgages or standard variable rate (SVR) mortgages, could be immediately affected.

Homeowners with an adjustable-rate mortgage may not see their payments increase immediately, but they are likely to increase shortly after interest rates increase.

But the exact amount depends on your loan and your loan-to-value.

However, if the BoE freezes the current interest rate, your lender may choose to do nothing.

This will come as a huge relief to those who have experienced fourteen consecutive increases in their mortgage bills.

Either way, your bank should warn you of any increase in your rate before it goes up.

We’ve also explained how to find the best mortgage rate.

What does this mean for credit card and loan rates?

Again, if the base rate is increased, the cost of borrowing through loans, credit cards and overdrafts could increase as banks are likely to pass on the increased rate.

Certain loans that you already have, such as a personal loan or car financing, usually remain the same because you have already agreed on the rate.

But rates on future loans could be higher, and lenders could increase rates on credit cards and overdrafts – although they should let you know in advance.

But if interest rate hikes are halted, nothing will likely change.

However, you can still cancel a credit card and have 60 days to pay off the outstanding balance.

What does it mean for my savings?

Savers are the largest group that has actually benefited from the last fourteen interest rate increases at the banks.

That’s because banks tend to enter the fray by offering market-leading interest rates.

Although banks typically act much slower than passing on higher interest rates.

If the base rate does not rise, banks will probably benefit from this and also leave their interest rates unchanged.

Anyone currently getting a low rate on easy-to-access savings might find it worth shopping around for a better rate and moving their money.

RISHI SUNAK finally got some good news yesterday: inflation fell sharply from four percent to 3.4 percent in February, the lowest level in two years.

The crisis began during the pandemic, when lockdowns and Covid restrictions led to shipping containers being stuck at sea and caused massive chaos in the supply chain. When shipping costs soared, companies began passing them on to shoppers.

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The inflation pain worsened when Russia invaded Ukraine and sent energy prices soaring.

So what does autumn mean for our wallets? . .

Question: HAS the inflation beast finally been tamed? The rapid decline from 10.4 percent in February last year to 3.4 percent marks the fastest decline in 12 months since 1978. So it’s fair to say the beast has been tamed and muzzled.

But it hasn’t stopped growling yet: we’re not richer, things are just getting more expensive more slowly.

At 3.4 percent, the level is still above 2 percent goal the Bank of England has explained.

However, economists at think tank the Resolution Foundation have said that if the pace of price falls continues to slow, inflation should fall to that golden 2 percent by then. next one month. This could give the Bank more confidence to lower interest rates.

Q: What’s behind the Last Fall? Falling hotel and restaurant prices and cheaper groceries helped bring the rate down.

Question: Does this mean my bills will finally go down? The energy bill, which is determined by Ofgem, is lower than a year ago, as are the petrol and diesel at the pumps.

But you may still see other bills rising and some groceries, including olives oil and chocolate, are increasing.

Mortgage costs have risen due to higher interest rates and rents are rising at a record pace, by 6.2 per cent in the 12 months to January 2024.

In addition, care home costs have increased, with the average weekly rate increasing by 19 percent compared to 2021/2022.

Although inflation is falling, we are not yet in deflation – a sustained decline in the price of goods and services. So overall, we will probably have higher expenses than last year.

Question: Is anything actually getting cheaper? Some dairy products that rose in price a year ago are now falling.

Security labels on packs of Lurpak heralded the start of the cost of living crisis, but now the price of tubs of butter has fallen by nine per cent.

Some dairy products that rose in price a year ago are now falling

Pasta, which also boomed after Russia invaded Ukraine because both countries produce so much wheat, has also fallen in price as supply chains have been strengthened.

Q: What does this mean for family finances in general? Shoppers have been smart and protected themselves from the full blow of inflation by switching to discounters and cheaper private labels.

According to MoneySupermarket’s latest index, regular household expenses such as insurance, mortgages and groceries have fallen by an average of £62.20 over the past three months.

However, this could also mean that households have stopped paying or canceled subscriptions.

A recent report from the banking chain DFS shows that we are postponing major purchases. And according to which? some households are missing payments on credit card or utility bills to keep up with mortgage payments.

Question: Are interest rates linked to inflation? The reason Britain has had fourteen rate hikes in a row is because the Bank is trying to reduce inflation.

Higher interest rates make borrowing more expensive and are therefore intended to reduce spending and encourage saving.

The idea is that a temperate climate would limit companies’ ability to raise prices because people can’t afford them.

Question: Does this mean rates will drop again soon? What does that mean for my mortgage? The Bank is expected to keep interest rates at the current 5.25 percent today, as its team of rate setters wants more confidence that this path of falling inflation will continue.

They are nervous that some big wage increases by top companies could push prices back up. But economists believe the Bank could cut rates within the next three months, with the next meeting in May.

Governor Andrew Bailey has said it doesn’t have to wait for inflation to reach 2 percent, but that it appears inflation is headed there.

There is a risk that if the Bank postpones the interest rate cut, companies and households will come under too much pressure.

Mortgage rates are already falling, with NatWest cutting home loan costs yesterday.

This is because the big banks are more confident that inflation will fall, so the Bank is likely to cut the base rate soon.

Q: What about the economy, will we finally get some growth? We are already emerging from a short recession, but growth is hovering around zero.

Inflation has made it harder for the economy to grow as the rising cost of goods has taken big chunks out of our pockets.

People have had to cut back because they can’t afford what they used to buy, and companies have reined in their investments because interest rates have made the cost of borrowing too high.

If there is more confidence that inflation will fall, people and businesses will start spending again, which should stimulate the economy.

Mortgage rates are already falling, while NatWest is cutting home loan costs

Q: What does this all mean for Rishi? One of the Prime Minister’s five promises was to halve inflation, and he has more than done that.

The problem is that people are still struggling, the price of goods is still expensive and the Bank’s higher interest rates have arguably played a greater role in reducing inflation than any government policy.

But after a grim ten days for the Prime Minister – full of conspiracies and internal rows – it is a much-needed boost.

He can say his plan is working and that people should start to feel a difference as wages continue to rise, mortgage rates fall and free child care is expanded, which should encourage more people to work.

The hope is that an improved economy will allow him to afford another round of tax cuts before the election.

A major lender has cut its mortgage rates after inflation fell more than expected and ahead of a key Bank of England meeting.

NatWest has announced it will reduce mortgage deals by up to 0.24% for those who refinance, and some deals by up to 0.07% from tomorrow.

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The bank will offer a five-year fixed rate remortgage deal for someone with a loan-to-value (LTV) of 90% at 5.30%, down from 5.54%.

Mortgage holders with a Loan-to-Value value of 60% can get a five-year remortgage deal at 4.48%, up from 4.59%.

The LTV is the percentage of the outstanding mortgage compared to the value of the home.

It comes after the latest inflation figures came in lower than expected, fueling expectations that the Bank of England could cut its key interest rate sooner than expected.

The CPI measure of inflation for February was 3.4% – down from 4% in January and the lowest level since September 2021.

Most economists had expected interest rates to be 3.5%.

Inflation is now moving closer to the Bank of England’s 2% target.

Inflation is a measure of how much the prices of everyday goods such as food and clothing, and services such as train tickets and haircuts, are now compared to a year earlier.

A target of 2% has been set for a steadily growing economy.

It comes ahead of tomorrow’s latest interest rate decision.

The Bank is expected to keep its base rate at 5.25% for the fifth time in a row, but the latest drop in inflation could see it fall sooner than expected.

Lenders tend to price their mortgages in anticipation of what the Bank will do in the future, rather than immediately. Hence NatWest’s decision to reduce some mortgage rates.

Rohit Kohli, director of estate agency The Mortgage Stop, said borrowers would see “some light at the end of the tunnel” after NatWest’s decision to cut rates.

Meanwhile, Ben Tadd, director at Lucra Mortgages, said other lenders could follow NatWest’s lead by cutting rates.

He added: “NatWest is the first major bank to take action on the positive inflation figures released this morning.

“We hope this could be the start of a new interest rate war in the mortgage market.”

It comes after a number of lenders cut mortgage rates in January, ahead of the BoE’s rate cuts this year.

But three major lenders, including Halifax and Santander, raised rates earlier this month after months of fluctuating swap rates, which underlie fixed-rate mortgages.

Other brokers were more cautious as NatWest also announced it would also increase rates on some two-year trackers by up to 0.4% tomorrow.

Tracker mortgages are more tied to the BoE base rate, meaning they can rise or fall at any time, unlike fixed interest rates which remain the same for the life of the deal.

Gareth Davies, director at South Coast Mortgage Services, said: “It is intriguing to observe NatWest’s decision to increase the prices of tracker products, especially when they are experiencing strong demand.”

Many homeowners looking to take out a new mortgage have opted for a tracker in anticipation of a drop in fixed mortgage rates this year.

Economists expect inflation is now likely to fall below the Bank of England’s 2% target in April or May, thanks to the upcoming 12% fall in the energy price cap on April 1.

They said this could pave the way for the Bank to start cutting rates in August or possibly as early as June.

How to get the best deal on your mortgage

Finding the best mortgage deal depends entirely on what’s available at the time, but there are ways to get ahead of the competition.

Usually, the larger the deposit, the lower the interest you can get.

If you take out a new mortgage and your loan-to-value ratio has changed, this could also give you access to better rates than before.

A change in your credit score or an increase in your salary can also help you access better rates.

If you have a fixed rate, you could see higher interest rates at the end of the current term, after the BoE increases rates from 2022 until last year.

And if you’re nearing the end of a fixed deal in the next six months, it’s worth contacting your broker now to lock in a rate.

If they drop between now and the end of your deal, you can always apply for a different rate before taking out a new mortgage.

If you leave a fixed deal early, you’ll typically be charged an exit fee, so you’ll want to avoid these additional fees.

But depending on the cost and how much you can save by switching or staying, it may be worth leaving the deal, but compare the costs first.

Use one to find the best deal Mortgage comparison tool to see what’s available.

You can also go to a mortgage broker who can do comparison shopping for you, with most offering free advice to help you secure the best deal for you.

Some brokers charge for advice, so ask them first.

It may cost a few hundred dollars, but it could save you thousands of dollars in total on your mortgage.

You will also need to consider the costs of the mortgage, although some have no costs at all, or you can add these to the cost of the mortgage.

But keep in mind that this means you will pay interest on it and it will be more expensive in the long run.

You can use a mortgage calculator to see how much you can borrow.

Please note that if you decide to take out a new mortgage with a new lender, you will need to pass affordability checks.

It can also check your credit file to see if you have repaid previous debts.

You may also need to provide documents such as utility bills, proof of benefits, your last three months’ pay slips, passports and bank statements.

It is possible to avoid new affordability checks by taking out a new mortgage with your existing lender, provided you do not want to borrow more or extend your term.

Do you have a money problem that needs to be solved? Get in touch by emailing money@the-sun.co.uk.

Moreover, you can join us Sun Money chats and tips Facebook group to share your tips and stories.

A major high street lender has introduced a huge rule change to help Universal Credit households get onto the property ladder.

Santander now accepts Universal Credit payments as a secondary income for mortgage affordability.

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Universal Credit is a social security scheme designed to combine several of the old “legacy benefits” into a single monthly payment.

Mortgage experts have described the change, which came into effect this week, as ‘good news’ for low-income households, who may find it difficult to get a mortgage.

Prospective buyers looking to borrow from Santander will need to prove they have a primary source of income in addition to their Universal Credit entitlement.

This can be done through a job or as a self-employed person.

This information must be clearly stated in the Universal Credit award letter and you must have been making a claim for six months.

Hopeful homeowners claiming Universal Credit may find it difficult to get a mortgage, but it’s not impossible.

Some banks refuse to grant loans to benefit recipients, but others will consider your application.

Eligibility varies depending on the bank, and some will accept your application depending on your financial circumstances.

That’s because they’re concerned about a borrower’s ability to repay their mortgage.

Karen Noye, a mortgage expert at asset management company Quilter, said: ‘Lenders offering additional income, such as Universal Credit, are good news for low-income households, especially where the low income is due to having a young family and more of a is a short-term measure. rather than in the long term.

“Different lenders have different criteria regarding additional income. Some will only accept it if it is guaranteed for the life of the mortgage, while others will consider it if it is likely to last at least another five years.”

HSBC, Lloyds Banking Group, Natwest, Barclays and Nationwide will consider mortgage applications from benefit claimants, including those on Universal Credit.

While Metro Bank only accepts Disability Living Allowance (DLA), Personal Independence Payment (PIP) and State Pension as income.

DLA and PIP are available for people who have additional care or mobility needs due to a disability or health condition.

Whether your application is successful depends on whether you have any other income or assets and on the benefits.

You must demonstrate that you can keep up with the repayments.

Some banks will include specific conditions in their offer, for example that you may only use a certain percentage of your benefit to cover the mortgage.

Find a mortgage advisor who will help you find a suitable provider who will consider your application.

They can also find the best deal for you.

However, keep in mind that they charge a fee for their services, so you should factor that into your costs.

What other mortgage assistance is available?

As soon as you think you may have a problem with your monthly mortgage payment (whether you cannot pay anything, cannot pay your monthly payment in full or cannot pay it on time), contact your lender immediately.

They have certain arrangements in place to help you if you are having a hard time.

You can ask your lender about the breathing space arrangement if you feel that payments are unaffordable.

Under the breather program, none of your debts will accrue interest and you will not be charged any fees for 60 days.

You are protected against collection agencies and bailiffs.

You may also be able to request a payment holiday; then you don’t have to pay anything.

But interest and fees may still accrue, and missed payments will have to be made up in the future.

Each company has different policies, so you will need to contact us to find out what support is available to you.

Mortgage Interest Support or SMI helps people on Universal Credit (and other benefits) by giving them a low interest loan.

The assistance goes towards paying the mortgage or towards loans taken out to help repair any damage to the home.

SMI is a loan that you must repay with interest when you sell your home.

You will receive help with paying the interest on a maximum of € 200,000 of your loan or mortgage.

But you only get a maximum of £100,000 if you get a pension credit.

The interest added to the loan can go up or down, but the interest rate will not change more than twice a year – the current interest rate is 3.03%.

Contact the office that pays your benefits to see if you can get an SMI loan.

There are also several charities and services that offer free help and advice if you are worried about money.

It is always best to contact one of these services before thinking about debt consolidation or hiring a debt advisor who will likely charge you.

Citizens Advice is a free and impartial service that helps you come up with a plan to pay off your debts, including which payments to prioritize and how to reduce your living costs.

There is one on the organization’s website useful page with advice about many aspects of debt, but you can contact them directly by phone, online or in person for more personalized help.

StepChange is another free advice service that offers support and guidance online or over the phone, and is completely confidential.

You’ll need to provide details about your debts, income and household expenses to get a clear picture of where your money is going.

Where possible, their advisors will help you come up with a plan to repay all your debts, but in a way you can afford.

National Debtline is a charity offering free and confidential advice to people in England, Wales and Scotland.

You can contact them online or by telephone on 0808 808 4000, Monday to Friday from 9am to 8pm and on Saturday from 9.30am to 1pm.

An advisor will help you figure out what you can pay back and help you determine the best solution for your debts.

Do you have a money problem that needs to be solved? Get in touch by emailing money@the-sun.co.uk.

Moreover, you can join us Sun Money chats and tips Facebook group to share your tips and stories.

MILLIONS of households may soon be able to catch their breath again as interest rates are forecast to remain at their current levels.

Decision-makers at the Bank’s Monetary Policy Committee (MPC) are expected to keep the base rate at 5.25% for the fifth time in a row on Thursday, March 21.

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The MPC will assess whether economic conditions are suitable to reduce, maintain or increase interest rates.

The Bank has indicated at recent meetings that cuts are likely in the future, although rates are expected to remain unchanged this week.

It comes as the base rate has risen from an all-time low of 0.1% since December 2021.

Experts now assume that an interest rate cut will likely take place in the summer, between June and August.

The Bank of England meets during the summer on May 9, June 20 and August 1.

Sarah Coles, personal finance expert at Hargreaves Lansdown, said: “At the end of last year, markets were reasonably confident that we would get a rate cut from the Bank of England in May or June, but persistent inflation at the start of the year forced them to think again.”

“At this stage, May looks highly unlikely, June is in the balance and the market is increasingly expecting a rate cut in August.”

Savings rates

What it means for savings

Savers have benefited from recent increases in the base rate, and would likely be negatively affected if it were to fall.

However, banks tend to compete for your money by offering market-leading interest rates, so make sure you do your research.

Sarah explains: “For savings, the good news is that you don’t need to know exactly what’s in the card to make the right decision, because your emergency fund should be in a competitive, easy-to-access account, so everything you need what you need to do is find the best rate available today.”

Putting money aside for any reason is always a good thing.

However, it’s good to have a plan you’re saving for as this will help you choose the best savings account for you and ensure you get the most out of your hard-earned money.

There are different ways to put money in a savings account.

The most popular are easy access accounts, which usually pay a variable interest rate that can change at any time, but you can access your money at any time, without any penalty.

The best savings rates are usually found on fixed-rate bonds. These pay a fixed interest rate over a specific period, such as one, two or five years, and you get your money and interest back once the product term expires.

What it means for your mortgage

Anyone who already has a fixed interest rate will not see their payments fall if the Bank of England cuts rates, as they are fixed for a fixed period.

So those looking to take out a mortgage must decide whether to get one now or wait until interest rates drop in the summer.

But other mortgages, such as a tracker or standard variable rate (SVR) mortgage, can also be directly affected.

SVRs are generally higher than fixed rates for this reason.

Sarah says: “For remortgagers, you are faced with the question of whether you should choose a fixed rate or switch to a tracker rate.

“Fixed rates are still quite expensive, but they do offer certainty about your expenses.”

“Tracker prices may be a bit higher today, but if prices fall from August onwards, you will see that decline.”

If you want to borrow around this time, that is also good news for you.

Alice Haine, personal finance analyst at Bestinvest, said: “Rate cuts would be a huge relief for many borrowers, especially those struggling with heavy debt or oversized mortgages.”

“A rate cut in the summer, perhaps as early as June, would provide a huge boost to potential buyers and existing homebuyers desperate for some relief from skyrocketing financing costs.”

What it means for credit cards

Certain loans you already have, such as a personal loan or car financing, usually remain the same because you have already agreed on the rate.

So you’re not likely to see any difference, but rates on future loans may be lower, and lenders may reduce rates on credit cards and overdrafts.

This doesn’t mean you should take out unnecessary loans or credit cards, as rates could rise again in the future.

Do you have a money problem that needs to be solved? Get in touch by emailing money-sm@news.co.uk.

You can also become a member of our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.

Homebuyers are being warned of ‘blink and you’ll miss it’ mortgage deals as interest rates continue to rise.

Mortgage interest rates have risen slightly under uncertain market conditions.

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Swap rates, which underlie fixed-rate mortgages, have fluctuated in recent months, causing lenders to adjust their interest rates.

As a result, the shelf life of a mortgage product has fallen from 28 days in February to 15 days in March – a six-month low.

But mortgage choice recorded its biggest month-on-month increase in six months and the number of options for borrowers reached more than 6,000 – the largest number in 16 years.

Deals available on the open market can be taken off the market and repriced at any time.

The rates offered when deals are revised may fall or rise from previous levels, but this all depends on the current financial climate.

Currently, the average two- and five-year fixed rates rose to 5.76% and 5.34% respectively between early February and early March.

Halifax, Santander and Co-op all announced last week that they would increase their rates.

It comes after lenders including HSBC and Natwest signed cheaper deals only to come back with higher rates.

Rachel Springall, financial expert at Moneyfacts, said: “Lenders responded to the change in swap rates, which led to numerous repricings of fixed rate deals, undoubtedly making it a challenging situation for borrowers and brokers to keep abreast of the changes.

“Interest rate volatility led to a rise in both the overall average two- and five-year fixed rates, the opposite direction that borrowers may have hoped for following the positive rate cuts recorded a month earlier.”

Nicholas Mendes, of mortgage adviser John Charcoal, said deals appear in such a way that you “blink and miss it”.

He added: “As mortgage rates are constantly being revised, so much so that we have seen lenders repricing twice a week, with some lenders having little to late notice of a rate change.”

It comes ahead of the Bank of England’s interest rate decision, which will be announced on Thursday.

The central bank is expected to keep interest rates stable at 5.25%.

But the Bank has indicated at recent meetings that cuts are likely in the future.

How can I secure a cheap interest rate on my mortgage?

respond quickly

In a competitive market, good mortgage deals can disappear quickly.

Nick said it’s best to act quickly once you’ve found a suitable mortgage rate.

He said: “To avoid delays, please submit your application immediately and provide all requested documentation.”

Check your credit score

If you have bad credit, the first thing you can do is find out what your score is.

Nick said: “Your credit score plays an important role in the mortgage approval process.

“Check your credit score beforehand and take steps to improve it if necessary.

“A higher credit score can help you qualify for better mortgage rates.”

Nick said this should better enable you to get a mortgage that suits you.

You can check your credit file for free at websites like ClearScore and Credit Karma.

If you find that you have bad credit, it doesn’t mean that providers won’t lend you money.

Basically, get a mortgage

A mortgage is basically a lender’s official estimate of how much they are willing to lend you based on what you can afford.

It can be quite useful for those looking for a first home as it shows that you are a serious buyer.

Nick said: ‘Keep this in mind before you start house hunting, as it will not only speed up the process when you find the right property.

“Pre-approval shows sellers that you are a serious buyer and can give you a competitive advantage. It will also flag any problem.”

To get an agreement in principle, you can go to a mortgage broker and see what deals are available that you might qualify for.

It is important to remember that a broker may charge a fee to prepare an agreement in principle for you. So ask about this first.

You can also go directly to the lender offering a deal you are interested in.

Going to a lender doesn’t mean you have to borrow from them when it comes to applying for a mortgage, so you don’t have to worry about getting stuck with one.

Gather the necessary documents

When you apply for a mortgage, you must be honest and upfront with the mortgage broker and the lender.

Gather all your personal information and be sure to avoid disclosing any information that could deter a lender from closing the mortgage at the last minute.

For example, if you have recently gone on maternity leave and do not disclose this to the lender, this will likely be reflected on pay slips and bank statements, which could negatively impact your application.

For example, working shorter hours should also be made public for the same reason.

Get mortgage advice

It may be tempting to go straight to a bank or building society for your first mortgage, but this can seriously limit your options.

Nick said visiting a real estate agent six months in advance can be helpful in helping you determine what your maximum purchase price will be.

Nick said: “Mortgage brokers can help you navigate the mortgage market and put you in touch with lenders offering competitive rates.

“They have access to a wide range of loan products and may be able to find deals you wouldn’t discover on your own.

“They will also be aware of any market changes or repricing from lenders.”

A broker can review a wider range of products and advise you on the right choice for your circumstances, as well as assess any hidden costs that can sometimes be difficult to find.

However, keep in mind that they charge a fee for their services, so you should factor that into your costs.

MILLIONS of households could once again breathe a sigh of relief as interest rates are expected to remain unchanged next week.

Decision-makers at the Bank’s Monetary Policy Committee (MPC) are expected to keep interest rates at 5.25% for the fifth time in a row.

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The MPC will meet this week to decide whether the economy is showing the signs it wants to see before it starts cutting interest rates.

But economists say that, as things stand, only one member of the nine-member committee is likely to think conditions are right for a cut.

The Bank has indicated at recent meetings that cuts are likely in the future after interest rates have been raised or left unchanged at each meeting for the past four years.

When the group met in February, only one of them, Swati Dhingra, voted for a rate cut.

Two voted for an increase, but the rest said they should stay at 5.25%.

Robert Wood, chief Britain economist at Pantheon Macroeconomics, said he expects the same mood this time.

Mr Wood said: “The MPC focuses on ‘tightness in labor market conditions, wage growth and service price inflation’ to assess ‘how long bank rates should be maintained at current levels'”.

“We believe the data did not surprise enough to trigger a change in guidance at the MPC meeting on March 21.

‘The Bank will continue to signal interest rate cuts, but with little news on the timing.

“We expect the same 1-6-2 (cut-hold-hike) vote as last month,” he said.

The Sun’s James Flanders explains how to find the best deal on your mortgage

Since that last meeting, gross domestic product (GDP) data for December showed the UK economy contracting by 0.3%, pushing it into recession.

That was worse than the 0.0% move the MPC had expected.

Both unemployment and consumer price index inflation have also been lower than the MPC expected in its February forecast.

Figures from the Office for National Statistics (ONS) show that the annual rate of price increase remained at 4% in January.

Mr Wood said: “On the whole, the data since the last meeting of the MPC confirms the predictions – rather than questioning them.

“That’s all the BoE needs to stay on track summer interest rate cuts.

“In February, MPC forecast inflation would fall to 1.4% over two years if rates remained restrictive at 5.25%. Policymakers just need the confidence to rely on these forecasts.”

New consumer price index inflation figures for February will be released by the Office for National Statistics on Wednesday.

The Bank will have these figures before making a decision.

What an interest rate pause means for your money

Below we reveal more about what a rate break could mean for your money.

Mortgages

When interest rates rise, it usually means that your mortgage costs will increase, depending on the type you have.

Those with fixed rates are usually safe for now until they remortgage.

But other mortgages, such as a tracker or standard variable rate (SVR) mortgage, can also be directly affected.

Homeowners with an adjustable-rate mortgage may not see their payments increase immediately, but they are likely to increase shortly after interest rates increase.

But the exact amount depends on your loan and your loan-to-value.

However, if the BoE chooses to freeze current interest rates, your lender may choose to do nothing at all.

This will come as a huge relief to those who have experienced fourteen consecutive increases in their mortgage bills.

Either way, your bank should warn you of any increase in your rate before it goes up.

Here you will find more information about how to find the best mortgage rate.

Credit card and loan rates

Here too, the cost of borrowing through loans, credit cards and overdrafts may increase if the base interest rate is increased, because banks are likely to pass on the increased interest rate.

Certain loans you already have, such as a personal loan or car financing, usually remain the same because you have already agreed on the rate.

But rates on future loans could be higher, and lenders could increase rates on credit cards and overdrafts – although they should let you know in advance.

If interest rate increases are halted again, nothing will likely change.

However, you can still cancel a credit card if you wish. You then have 60 days to pay off the outstanding balance.

Savings rates

Savers are the most important group that has actually benefited from the last fourteen interest rate increases.

That’s because banks tend to enter the fray by offering market-leading interest rates.

Although banks usually take action much slower than when they pass on higher interest rates.

If the base rate does not rise, banks will probably benefit from this and also leave their interest rates unchanged.

Anyone currently getting a low rate on easy-to-access savings might find it worth shopping around for a better rate and moving their money.

ONE of Britain’s biggest lenders has changed its mortgage criteria, which could mean:

Halifax is lowering the maximum working age for mortgage applicants from 75 to 70.

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There is a maximum working age of 70 for:

• Remortgage applications for any capital increase/additional loans
• Some purchase and remortgage applications due to the credit score level achieved and overall credit profile.

The move could force thousands of borrowers to shorten the length of their current mortgage term, dramatically increasing their monthly payments.

Most lenders only allow borrowers to take out a mortgage as long as they plan to work.

Halifax’s decision to lower the applicable working age will now reduce the amount of time someone can borrow by five years.

It marks a major turnaround for Britain’s biggest lender, which only raised the maximum working age for mortgages to 75 in August last year.

Darryl Dhoffer, consultant at The Mortgage Expert, told news agency Newspage: ‘This is outrageous. Halifax appears to be turning on the borrowers who need them most.

“Halifax turns a blind eye to the struggles of the average person.

“High mortgage rates and shorter terms are a recipe for disaster, pushing even more borrowers into debt and hardship.

“They only recently extended it to 75, so it seems a bit strange to bring it back to 70 now.

Many of the major high street lenders, including Nationwide and NatWest, already have a maximum age limit of 75.

But others, including Barclays, have a lower age of 70.

A spokesperson for Halifax Intermediaries said: “These changes have been made as part of a regular review of our lending criteria and will ensure we can continue to lend responsibly to a wide range of customers.

“For all other applications we continue to apply a maximum working age of 75.”

The change will take effect from Monday, March 18.

What mortgage assistance is available?

As soon as you think you might have a problem with your monthly mortgage payment (whether you can’t pay anything, can’t make all your monthly payments, or can’t pay it on time), contact your lender immediately.

They have certain arrangements in place to help you if you are having a hard time.

Under the government’s Mortgage Regulations, you can temporarily request to convert your mortgage to an interest-only mortgage, or extend your term to reduce monthly payments.

You do not need to submit further income information or share monthly spending obligations; you can simply ask your lender to make the switch.

And it won’t affect your credit score for six months if you choose to take the offer.

If someone taking advantage of the temporary measures decides to return to their original plan within six months, they are free to do so.

Ask your lender about the breathing space arrangement if you feel that payments are unaffordable.

Under the breather program, no debts will accrue interest and no fees will be added for 60 days.

You are protected against collection agencies and bailiffs.

You may also be able to request a payment holiday; then you don’t have to pay anything.

However, interest and fees may still accrue, and missed payments will need to be made in the future.

Each company has different policies, so you will need to contact us to find out what support is available to you.

Mortgage Interest Support or SMI helps people on Universal Credit (and other benefits) by giving them a low interest loan.

The assistance goes toward mortgage payments or loans taken out to help repair any damage to the home.

SMI is a loan that you must repay with interest when you sell your home.

You will receive help with paying the interest on a maximum of € 200,000 of your loan or mortgage.

But you only get a maximum of £100,000 if you get pension credit.

Many local municipalities have welfare assistance programs to help struggling families.

The assistance available varies, but you can get free cash, food stamps, and help with bills like rent and utilities.

Check with your municipality whether you are eligible and what you can claim.

And of course it is always worth checking whether you are entitled to all available benefits.

Entitlement is free calculator calculates whether you are eligible for various benefits, tax credits and Universal Credit.

Debt charity StepChange also has a benefits checker that is free to use and does not record your results.