MORTGAGES FOR FIRST TIME BUYERS; A GUIDE TO BUYING PROPERTY AMID RISING INTEREST RATES – YAHOO! FINANCE
Amid record-high inflation and escalating costs of living, the Bank of England raised interest rates again last week.
Rates have edged up six times since December from a historic low of 0.1 per cent to 1.75 per cent, to curb escalating inflation and the cost of goods. The most recent increase is the first half point rise for 27 years.
On one hand the cost of goods, services and energy — with inflation at a 40-year-high— is cooling the hot housing market. On the other hand, rising interest rates are pushing people to try and secure their first mortgage or fix their current mortgage in case such hikes continue.
To encourage wannabe homeowners and make it easier to borrow the Bank has also removed the requirement for lenders to impose an affordability test, which forced lenders to assess whether potential borrowers would be able to afford an interest rate hike equivalent to three per cent.
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