Martin Lewis issues mortgage warning to home buyers as interest rates set to soar | The Sun
MARTIN Lewis has issued an urgent warning for new homebuyers after interest rates were predicted to soar to 6% next year.
The consumer champion was answering questions about the housing market on Good Morning Britain (GMB) earlier today.
And the Money Saving Expert website founder suggested first-time buyers shouldn't buy a house now unless they have a good deposit and are 100% set on the home they want to buy.
He said: "If you've got a decent deposit, and you've found a house that you love,and you've got a mortgage that is affordable for you.
"And you're going to stay in that property for a long time, get on with it, buy your house.
"If you're doing this because 'this isn't the house that I want, but I feel I should do it before everything goes wrong and it all goes belly up', don't buy your house."
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The consumer champion went on to explain despite the advice, it's hard to predict what will happen with the housing market at the minute because there are "so many variables and it's incredibly complex right now."
He said: "We're working with so many variables, it's incredibly complex right now.
"There are no firm right answers and I apologise if you play this back in two years time and I totally wrong. That's possible."
It comes as hundreds of mortgage deals were pulled from the market last week over uncertainty at where interest rates were heading.
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The markets went into turmoil after the pound against the dollar collapsed to $1.03 following the government's mini-budget announcement.
The Bank of England has said its base interest rate could reach 6% next year as well, meaning homeowners would face a jump in monthly loan repayments.
The current Bank of England base interest rate sits at 2.25%, after it was increased in September.
That rate affects how much banks charge for borrowing including mortgages, loans and credit cards.
But homeowners are already facing increased rates up to 6%, some brokers are saying.
House prices have also remained at record highs in recent months.
However, Lewis said on GMB this morning it looked like they could come down.
He said: "What's going to happen to house prices?
"We are in the period for the first time I can remember in recent times where the majority of commentators are talking about a correction, in other words prices coming down on house prices.
He added: "So there is a risk by buying now you're locking yourself into a high mortgage on a high house price.
"And, of course, most first-time buyers don't have much deposit, so it's a big loan-to-value and the house prices may well come down and you may regret it later."
How can you get the best deal on your mortgage?
If you're set on the idea of re-mortgaging or looking to buy your first home now, there are some tips you can use to help.
Greg Cunnington, from mortgage broker LDN Finance, previously told The Sun shopping around was one way to get the best deal.
Different lenders have different lending criteria so some might let you borrow more than others.
So if you know what's out there, it will help you to make the best-informed decision.
If you don't want to shop around, you can always use a mortgage broker.
A mortgage broker is a person or company that acts as the middle person between the buyer and the mortgage lender.
Mortgage brokers have become more popular in recent years as the housing market becomes more competitive.
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If you're willing to, you can fix your mortgage for longer as well.
Some lenders let you borrow more if you fix for a longer period, and with rates predicted to reach around 6% next year, fixing now could save you money in the coming years.
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