PRO­TECT AGAINST RIS­ING IN­TER­EST RATES

Woman (UK) - - Make Your Money Go Further -

Pre­pare for fi­nan­cial his­tory. on Thurs­day 2 novem­ber, for the first time in a decade, the Bank of Eng­land is pre­dicted to vote to in­crease in­ter­est rates. If you’ve a credit card, mort­gage debt or sav­ings, the sooner you act to pro­tect your­self the bet­ter.

the source of the pre­dic­tion is Bank of eng­land gov­er­nor mark car­ney, who said, ‘in the rel­a­tively near-term, we can ex­pect in­ter­est rates would in­crease some­what.’ com­bine this with the fact in­fla­tion is at a five-year high and, while nowt’s cer­tain, a rise from 0.25% to prob­a­bly 0.5% looks on the cards. so i wanted to give you enough time to take key ac­tions now in case it hap­pens (and even if it doesn’t, most of this is good to do any­way)... 1 MORT­GAGE HOLDERS: Check im­me­di­ately if you’re on the best pos­si­ble deal. Those on fixes won’t see any change un­til their deal ends. Yet for those on vari­able or tracker mort­gages, a 0.25% rise means roughly £200 a year more per £100,000 of out­stand­ing mort­gage. worse, many, es­pe­cially those on lenders’ stan­dard rates, are al­ready over­pay­ing. and while mort­gages are cur­rently at all-time lows, a rate rise will likely sig­nal the end of that. so check now if you can save… take 2 mins to bench­mark the best deal. my mort­gage com­par­i­son at mse. me/mort­gagebest buys in­cludes all deals avail­able to bro­kers and di­rec­tonly deals. Find­ing a cheap deal isn’t enough – you need to get ac­cepted. your credit his­tory is a huge part of whether you’ll be ac­cepted for any type of credit, in­clud­ing a mort­gage. my free mse.me/cred­it­club shows your score, gives you ac­cess to your ex­pe­rian credit file and has tips for how to boost it.

head to clearscore.com to see your equifax file. lenders also do af­ford­abil­ity tests. these stress test af­ford­abil­ity if rates were 6% or 7%. a good mort­gage bro­ker can help match your cir­cum­stances to deals that will ac­cept you – as they’ve in­for­ma­tion that isn’t avail­able to the pub­lic. to find a lo­cal bro­ker, ask friends for rec­om­men­da­tions or use un­bi­ased.co.uk or vouched­for. co.uk to find one. al­ter­na­tively, some phone-only bro­kers such as landc.co.uk are fee-free.

2 SAVERS: Rate rises are good news, but do con­sider giv­ing your­self the flex­i­bil­ity to move. low in­ter­est rates have pun­ished savers, es­pe­cially older peo­ple who saved hard and planned to live off the in­ter­est. so a rate rise is pos­i­tive. check your sav­ings rates – if it’s less than 1%, it’s a rip off, move it. For full best buys, see mse.me/top­sav­ings.

3 EX­IST­ING CREDIT CARD DEBT: If you pay in­ter­est, check now if you can cut it.

i’d push any­one who pays in­ter­est on ex­ist­ing credit card debt to ur­gently check if you can do a bal­ance trans­fer – where you shift it to a new card, with a cheaper in­ter­est rate. of course, for most with on­go­ing debt, the chal­lenge is be­ing ac­cepted.

my bal­ance trans­fer el­i­gi­bil­ity cal­cu­la­tor at mse. me/btel­igi­bil­i­ty­calc shows which 0% deal you’re most likely to get.

of course, with credit card aprs al­ready of­ten over 18%, a 0.25% rise won’t make much odds. yet af­ter years of ever bet­ter ‘best ever’ 0% deals, things are now mov­ing the other way, due to warn­ings about ir­re­spon­si­ble lend­ing and a rate rise would add to that mood mu­sic.

if you do a bal­ance trans­fer, as al­ways fol­low the golden rules. a) clear the card or trans­fer again be­fore 0% ends or you pay the apr. b) never miss the min monthly re­pay­ment or you can lose the 0%. c) you must usu­ally do the bal­ance trans­fer within 60/90 day.

Get mar­tin’s FREE tips and money-off vouch­ers emailed di­rectly to you each week by sign­ing up to mon­eysaving­ex­pert.com/tips

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