How do interest rates affect mortgages?

 



Interest rates significantly impact mortgages. Here is a brief overview:

  • When interest rates rise, mortgage rates tend to increase, making borrowing more expensive. This can lead to:
    -Higher monthly mortgage payments

    -Increased costs over the life of the loan
  • Conversely, when interest rates fall, mortgage rates often decrease, making borrowing more affordable. This can result in:
    -Lower monthly mortgage payments
    -Reduced costs ove rthe life of the loan

This can affect:
  • Homebuyers: Higher rates might deter buyers or lead them to consider smaller homes.
  • Existing homeowners: Those with variable-rate mortgages might see their payments increase, while others might consider refinacing to lock in lower rates.

If you would like to be put in touch with one of our independant mortgage advisors for a free informal chat please email me on Rachel.johnson@cheltonbrown.co.uk or call 01933 829088





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