After Liz Truss’ announcement of a package of new policies, the UK economy has had a bumpy week, to say the least. The main worry for most of us was the potential rise in interest rates due to inflation. This saw lenders pull mortgage deals for many and hike interest rates for everyone else. Overall, this could end up costing UK homeowners a lot more over the term of their mortgage.
This may have you wondering, what could happen to your mortgage? Fortunately, it is not all bad news for property owners.
Will my mortgage cost more?
After Covid-19 and as a result of the war in Ukraine, inflation has been on the increase, especially in Europe. This means that overall, goods and services cost more on average compared to last year. One of the ways to combat this is to increase interest rates. This means it pays to save however makes it more expensive to borrow.
The good news is that whilst interest rates in the UK have shot up, European rates have remained relatively low. But, they have still seen a large increase over the past year and are likely to increase further.
This could see your mortgage payments increase monthly however, it is unclear just how high-interest rates may go.
Are there any other increasing costs?
There aren’t many other impacts on property owners beyond this increase in mortgage costs. However, as the price of everything else increases, you may have less disposable income.
If you are already struggling to pay your mortgage, you may find your belt tightening and could fall into arrears.
The increase in borrowing prices, a cost of living crisis and a change in attitudes are also causing a decrease in demand for holiday homes. This means if you can’t afford your property or you are in negative equity, it will be more difficult to sell your property and, you may end up selling it for less money. This could, in turn, leave you with a significant mortgage shortfall that you will need to pay.
Although this may seem like a lot of doom and gloom, like all property debt issues, there are options available. If you are worried about being able to afford your property, get in contact with us today to find out your options.
EU Property Solutions are experts in protecting your UK finances from foreign banks. Over the past 10 years we have saved our clients over £13 Million in property debt issues. If you are worried about a foreign property or would like advice on your situation, you can contact us for an obligation-free call on 0330 124 1230 or email us at [email protected]