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And the move will make the cost of borrowing, including loans, credit cards and mortgage repayments more expensive.
Martin said on ITV’s Good Morning Britain: “Anybody coming off a cheap fix at the moment will likely be paying around 3% more than they were paying previously.
“That percentage rise equates to £160 more per month per £100,000 of mortgage.”;
But the exact amount that your mortgage repayment will rise by will depend on the size of the mortgage, the rate you fixed at and the loan-to-value when you remortgage.
But Martin still warned that households shouldn’t make any assumptions by thinking that interest rates will go back to the super cheap rates that we had in previous years.
Martin said that 4-5% fixed mortgage rates could be the new normality.
We’ve also explained below how you can choose the best mortgage deal and explained whether it’s better to go direct or use a broker.
How to choose the best mortgage deal?
There are lots of factors to consider when searching for the best mortgage deals.
The amount you can borrow and interest rate are important factors but you should also consider the type of mortgage.
Do you want the certainty of a fixed-rate mortgage or the flexibility of a tracker that could get cheaper rates and doesn’t have exit fees?
There are mortgage calculators online that will let you compare the monthly cost of a mortgage based on the interest rate and any fees.
A lender or mortgage broker will be able to offer advice on the best type of mortgage deal to meet your needs.
Shop around for the best mortgage deals rather than opting for the first bank you see.
You can also use a comparison website to find deals across the market based on your level of deposit and whether you want a fixed or variable rate.
A comparison website will usually let you search for all types of home loans such as for first-time buyers or the best buy-to-let mortgage deals.
This will give you an indication of what is on offer but you will need to do the application yourself.
Some lenders may not be on comparison websites so it is worth searching directly online as well.
Alternatively, a mortgage broker can help search the market more widely and find the most suitable deals for you.
Is it better to get a mortgage from a bank or a broker?
A bank may offer the best mortgage deal for you but shop around before you commit.
This is because a bank adviser will only offer their own products.
Limiting yourself to one bank’s products could mean you end up paying more than you needed to or you may not even meet their criteria.
Alternatively, a broker can use their market knowledge to help decide which type of mortgage and lender is best for you.
This could be of benefit if you are self-employed or have a poor credit rating as they may have more experience dealing with these sorts of applications.
It saves time on doing multiple applications, as you just tell your broker your income and expenses and they will work out the best mortgage you can get.
They can usually help with your application and will fight your corner to get you approved.
A broker will be able to advise on a range of products from different lenders, but these may also be limited to a panel so you should check if they are tied or work across the whole market.
There may, however, be extra fees when using a broker.
A mortgage may have an application or product fee but a bank adviser won’t charge anything on top of that.
In contrast, a mortgage broker may have their own fees for their advice.
When should I start looking for a new mortgage deal?
Lots of preparation is needed if you are remortgaging.
Lenders typically move households onto a more pricey SVR once your mortgage deal comes to an end.
That means you could have been on one of the best mortgage deals and suddenly your monthly repayments will increase.
But households can start looking for a new mortgage at least six months before their deal ends.
Lots of lenders now let customers lock in a new rate six months in advance.
Others will let you lock in a new rate at least three months ahead.
It can take at least two months for a remortgage to complete so you need to allow time to find a new deal and make the application.
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