ITV’s Martin Lewis returned to our screens tonight for a one-off special all about tackling the ongoing and ever worsening cost of living crisis – and brought with him a stark warning.
The money saving expert had been battling everything from holiday costs to energy bills on tonight’s show and then turned his attention to mortgages.
He issued a stark warning to everyone who already has a mortgage – and those looking to get one – that things are going to get more expensive and it will also be more difficult to get a new mortgage deal when your current one expires – all thanks to the good old cost of living crisis.
Martin Lewis was asked a question from a viewer about re-fixing your mortgage deal when your current fixed term expires.
It comes after the Bank of England warned interest rates are going up, which in turn is set to push up the cost of mortgages as cheaper rate deals disappear.
Martin Lewis told viewers of the ITV show : “To get a mortgage, to be accepted, you have to pass a credit check and an affordability check. An affordability check examines ‘have you got room to pay this mortgage’.
“But we’re in the midst of a cost of living crisis. So everyone has less room than they did before because other costs have gone up. So my great fear is we’ve seen interest rates go up but more people aren’t going to be accepted when they apply for a mortgage because more are going to fail affordability checks.
“And that leaves us with a ticking timebomb because most people are on cheap fixes and they’re going to expect to fix again on the cheap rate and it’s going to be a lot higher and they may not be able to get them and that is a real problem coming forward.
“So if you’re coming to the end of your rate, you need to prepare in advance. You might even want to pay a booking fee to lock in a cheap mortgage in case things get more expensive and if it doesn’t you can get a cheaper one elsewhere, so it’s like an insurance policy so you lose a few hundred quid but have locked in a cheap mortgage. Speak to a mortgage broker for help.
“As for two or five year deal? Well if things are going up and you want certainty and you can get a cheap five year deal, a five year deal will give you certainty. I can’t promise it will have been cheapest when you look back in hindsight, but if you want peace of mind, in an uncertain world – and boy are we in an uncertain world – then fix and fix longer.”