Martin Lewis explains what you need to do now during the ‘perverse’ mortgage crisis | Personal finance | Finance

Martin Lewis called the current mortgage crisis “perverse” and “unprecedented” and shared his suggestions on what people with standard variable mortgage rates and expiring fixed rate deals can consider. The Money Saving Expert founder has warned viewers of Good Morning Britain that rates could rise massively over the next year.

Speaking on ITV, Martin Lewis said: “The mortgage market is wicked at the moment – we even have an inverse yield curve where 10 year mortgages are cheaper than five and five can be cheaper only two years.

“So if you can fix longer, it’s worth looking into.

“Absolutely, if you have a variable or fixed rate mortgage that is coming due in the next three, four or five months, I would consider trying to get a mortgage now.

“Go to a comparison site to see what’s available to you, then check out your existing business to see what it will bring you, then mortgage brokers are worth their weight in gold right now – go find a mortgage broker mortgages.”

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The financial reporter said that was not the only problem Britons were currently facing.

He added: “The second problem if UK fares go up to 6% is cheap fares, but once you start applying you have to pass an affordability check, clearly a lot of people will start to fail affordability checks.

“So they’ll have to stay on their own corporate deals or go variable rate and worse because now we have a risk to property prices.

“It’s not a prediction, I’m saying there is a risk that house prices will go down – they can’t and they can keep going up – but if house prices go down it will hurt to people’s loan-to-value ratio, which will make it even more difficult to get a cheap mortgage.

“So there is a ticking time bomb if UK mortgage rates follow what the market is predicting and interest rates rise to 6%.”

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She continued: “The remaining products are changing at a rapid pace, lenders seem to be unsure of what to offer and at what price with so much change in the money markets at the moment.

“Unfortunately for borrowers, this means the cost of a mortgage has increased, with some providers raising their fixed rates by more than 1.50%, while the base rate has only increased by a fraction of that. .

“However, interest rates on best buys for five-year fixed rates haven’t gone up as much as two-year fixed rates, so if you’re someone who’s on a variable rate and looking to fix, or is nearing the end of a current course deal then now is the time to act as interest rates change daily.

“Many of the best rates are only available directly from a lender, so it’s worth contacting your existing lender, or the bank you have other accounts with, to see what they have to offer. We We can only hope that the situation will calm down soon, so that at least borrowers can look for other mortgage offers if they need it.

Good Morning Britain airs weekdays on ITV from 6am.