There have been eight consecutive interest rate hikes and that is making loans, to say the least, very damn expensive! However, that doesn’t mean you have to sit back and take it. Mortgages, like all debt are affected by movements in the European Central Bank base rate which is now 4%. Two years ago the rate was half this amount so the interest portion of loans has doubled!
The good news is that Mortgage Interest Relief, or ‘Tax relief at source’ has also doubled for first time buyers since the last budget, and its up by 20% for non-first time buyers. An important note is that you are a first time buyer for the first seven years, if you sold your first house and moved into another one within the first seven years you still qualify as a first time buyer.
So how do you hedge yourself against rising rates? The simplest means of doing it are as follows:
Refinance to a better deal – this means moving your present loan to get one at a cheaper …