How to Battle Back Against Base Rate Hikes

<h1>How to Battle Back Against Base Rate Hikes</h1>Author: <a title="Paul Lucas" href="http://www.articlesbase.com/authors/paul-lucas/9427.htm">Paul Lucas</a> When the Bank of England base rate goes up it broadly means two things... great news for savers, and bad news for homeowners. That's why it won't surprise anyone to find out that whereas savings providers are waiting until the last minute to pass on the benefit of improved interest rates, mortgage lenders have been quick to pass on the hiked costs to customers. 
 
For the most part <a href="http://www.moneysupermarket.com/mortgages/">mortgages</a> have only been increased in line with the base rate, with the likes of Cheltenham & Gloucester, Intelligent Finance and Halifax all increasing their rates by the standard 0.25%. Only a few companies have gone above that rate with Abbey increasing its rate by 0.34% and both the Bank of Scotland and Mortgage Business increasing their rates by 0.35%, although look out for further increases from other companies at the turn of the month. 
 
However, with a further base rate increase expected in the new year, homeowners are likely to be stung again, so what can be done to combat these increases? My suggestion is to consider a <a href="http://www.moneysupermarket.com/mortgages/">remortgage</a> with an offset or fixed rate. 
 
An offset mortgage means cash savings are set against your debt so that you only pay interest on the balance. This means that monthly repayments are calculated on the full debt before offsetting is taken into account, and while this means you overpay each month it also allows you to clear the debt much quicker and you benefit by not paying tax on the interest you would normally earn on savings. 
 
A fixed rate mortgage offers real peace of mind in the face of further hikes. Anyone who is paying out near the top end of his or her affordability would rightly be concerned about the real risk of paying even more each month. That's why a fixed rate mortgage can offer real assurance that you will pay a manageable monthly rate for a set period of time. 
 
However you choose to combat the base rate hike be sure to keep a close eye on the market by visiting the <a href="http://www.moneysupermarket.com/mortgages/">mortgage calculator</a> at moneysupermarket.com to find the cheapest deal for your needs. About the Author: To compare more than 8,500 <a href="http://www.moneysupermarket.com/mortgages/">mortgages</a> or to use the <a href="http://www.moneysupermarket.com/mortgages/">mortgage calculator</a> visit <a href="http://www.moneysupermarket.com" target="_blank">www.moneysupermarket.com</a>Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/mortgage-articles/how-to-battle-back-against-base-rate-hikes-75993.html" title="How to Battle Back Against Base Rate Hikes">How to Battle Back Against Base Rate Hikes</a>

When the Bank of England base rate goes up it broadly means two things... great news for savers, and bad news for homeowners. That's why it won't surprise anyone to find out that whereas savings providers are waiting until the last minute to pass on the benefit of improved interest rates, mortgage lenders have been quick to pass on the hiked costs to customers.

For the most part mortgages have only been increased in line with the base rate, with the likes of Cheltenham & Gloucester, Intelligent Finance and Halifax all increasing their rates by the standard 0.25%. Only a few companies have gone above that rate with Abbey increasing its rate by 0.34% and both the Bank of Scotland and Mortgage Business increasing their rates by 0.35%, although look out for further increases from other companies at the turn of the month.

However, with a further base rate increase expected in the new year, homeowners are likely to be stung again, so what can be done to combat these increases? My suggestion is to consider a remortgage with an offset or fixed rate.

An offset mortgage means cash savings are set against your debt so that you only pay interest on the balance. This means that monthly repayments are calculated on the full debt before offsetting is taken into account, and while this means you overpay each month it also allows you to clear the debt much quicker and you benefit by not paying tax on the interest you would normally earn on savings.

A fixed rate mortgage offers real peace of mind in the face of further hikes. Anyone who is paying out near the top end of his or her affordability would rightly be concerned about the real risk of paying even more each month. That's why a fixed rate mortgage can offer real assurance that you will pay a manageable monthly rate for a set period of time.

However you choose to combat the base rate hike be sure to keep a close eye on the market by visiting the mortgage calculator at moneysupermarket.com to find the cheapest deal for your needs.

To compare more than 8,500 mortgages or to use the mortgage calculator visit www.moneysupermarket.com

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