June 22nd, 2023
In the ever-changing economic landscape, contractors and self-employed individuals must stay informed about developments that can affect their financial well-being. The recent increase in the base rate to 5% on June 22, 2023, has significant implications for mortgage borrowers. How does this increase impact contractors and self-employed individuals?
Understanding the Base Rate Increase:
The base rate, determined by the Bank of England, serves as a benchmark for lenders’ interest rates. The recent increase to 5% signifies a shift in monetary policy, reflecting the Bank of England’s response to inflationary pressures and the broader economic climate. This increase follows a series of adjustments over the past two years, indicating an evolving lending environment.
They explain that this is a direct correlation due to the rising inflation rate.
Impact on Mortgage Rates:
The base rate increase directly affects mortgage rates, influencing borrowing costs for existing and potential mortgage holders. Higher interest rates mean increased monthly repayments and potential challenges in affordability. Contractors and self-employed individuals need to comprehend the implications of the base rate increase on their mortgage journey.
Insights from CMME Mortgages:
CMME Mortgages, a leading mortgage broker specialising in serving contractors and self-employed borrowers, offers expert insights and guidance to navigate the impact of the base rate increase effectively. Simon Butler, Head of Mortgages at CMME, shares his expertise on the matter:
“The recent base rate increase introduces new considerations for contractors and self-employed borrowers. It is crucial for individuals to review their current mortgage arrangements, explore options aligned with their financial goals, and seek professional advice to make well-informed decisions.”
Recommendations for Contractors and Self-Employed Borrowers:
Assess Your Mortgage:
Take the opportunity to review your existing mortgage and evaluate the impact of the base rate increase. Consider whether your current mortgage suits your financial circumstances and explore refinancing options if it aligns with your objectives.
Consider Fixed-Rate Mortgages:
Given the expectation of further rate changes, fixed-rate mortgages can provide stability and protection against future increases. They offer the assurance of consistent repayments over a set period, enabling you to plan your finances with confidence. You can find out more here
Seek Expert Advice:
Navigating the mortgage landscape can be complex, particularly for contractors and self-employed individuals. Collaborating with a specialist mortgage broker like CMME Mortgages grants access to tailored solutions and expert advice tailored to the specific needs of contractors and self-employed borrowers.
Plan for Affordability Changes:
Take proactive measures to manage your affordability. Evaluate your income, track expenses, and plan for potential rate increases. Building a financial buffer and maintaining a strong credit profile will ensure stability and flexibility in the face of changing interest rates.
The recent base rate increase and the evolving economic landscape necessitate a proactive approach for contractors and self-employed borrowers. By understanding the implications of the base rate increase and seeking guidance from experts like CMME Mortgages, individuals in these categories can make informed decisions and navigate the market effectively. Utilize the resources and support available to adapt your mortgage strategy, secure competitive rates, and achieve your homeownership goals with confidence.
Remember, CMME Mortgages is committed to supporting you throughout your mortgage journey, providing personalized advice and solutions tailored to the needs of contractors and self-employed individuals.
Contact us today on 01489 555 080 or Info@cmme.co.uk to speak with our mortgage experts and take proactive steps toward achieving your mortgage goals.