For mortgage customers, the news about interest rates is not good. According to UK Finance, 1 point six million UK homeowners with fixed rates will have their agreement expire by December 2024.
Here are some advice on coping with rising costs from some of the top mortgage experts in the UK.
Your mortgage might now work harder for you if you still have time left on a low fixed-rate agreement.
The majority of lenders permit annual overpayments of up to 10 percent, but David Hollingworth of mortgage brokers London and Country advises keeping some money aside as a contingency fund because the money won't be as accessible after it has been used to pay down the mortgage.
In order to pay down a portion of the mortgage before negotiating a new deal, money placed in a savings account can accumulate and earn interest.
According to Richard Dana, chief executive of digital mortgage broker Tembo, switching to an interest-only mortgage can keep your repayments manageable.
To avoid paying off your remaining mortgage balance at the end of your mortgage term, he continues, it is best to use this as a temporary fix.
Your eligibility will be determined by your income and the amount of equity you own in the property.
For those with a growing family or those who live in a small apartment, this may not be a viable option.
Selling off a larger home and purchasing a smaller one, however, may allow older mortgage customers whose children have left the nest to reduce the size of their mortgage or even eliminate it altogether.
"Consumers looking to refinance may find it challenging to afford higher interest rates, so seeking independent advice is essential to consider all of their options, including downsizing," says Rachel Springall from financial information company Moneyfacts.
Although 30 and even 40-year terms are now available, the typical mortgage term is 25 years.
According to David Hollingworth, extending the term can help lower the monthly payment but increase the total cost of the mortgage by tens of thousands of pounds in interest.
"Be sure to regularly assess whether you might be able to reduce the term as your circumstances change. ".
There are many ways to generate a little extra income, including listing your home on a short-term rental website like AirBnB, renting out your parking space through an app like Just Park, or taking in a lodger or international student.
According to Richard Dana, "under the government's rent-a-room program you will get a tax free allowance of £7,500 per year for income generated from your main home too."
