Any Expats due to re-mortgage are being urged to take advantage of current low rates as soon as possible because the forecasts suggest mortgage rates will begin rising as soon as next year.
The figures from the Office for Budget Responsibility (OBR) were discovered in documents, released last week, providing more detail on the Budget which was delivered by Chancellor Rishi Sunak.
The public body, which provides independent forecasts on finance and the economy, said it expected mortgage interest costs to begin rising next year before hitting a 13% increase in 2023.
The figures showed Expat UK homeowners needed to be braced for a big leap in mortgage costs to 14% in the first three months of 2023. This would then climb to 14.8% in the second quarter, before dropping to 10.5% by the end of the year.
The reason for the rise is down to the Bank of England base rate, which is looking set to start climbing from its 0.1% low very soon.
Expat UK homeowners need to be aware that it’s a case of if, not when, for an interest rate rise now and the clock is ticking on the record low mortgage rates we’ve all become accustomed to.
Expats on a fixed-rate deal now could face much higher rates when they come to re-mortgage in the coming years.
Any Expat who signed up to a two-year fixed rate deal earlier this year, nabbing a record low rate, will face a stark rise when they come to re-mortgage in the first half of 2023.
In a consistently increasing rates environment, the longer you fix the longer you can lock in today’s low rates. However, homeowners need to be careful when thinking about any long-term fixes.