The news this week that inflation rose to its highest level since autumn 2008 in April could scare many home-owners. With weekly financial outgoings at a high, many of us are feeling the pinch in our pockets. Food, gas, electricity and petrol costs are putting a squeeze on many family budgets and it is more important than ever for individuals to prioritise weekly outgoings, and distinguish between ‘must haves’ and those ever tempting ‘nice to haves’.
If you are a homeowner, your monthly energy bills, food costs, and of course, mortgage payments, must be a priority. Once these essentials are accounted for it is much easier to see which ‘nice to haves’ you can splash out on. However, this is far easier to do if these essential costs remain the same each week. By keeping a core item shopping list, arranging a fixed direct debit with your energy supplier and, most importantly, choosing a fixed rate mortgage, you will find it far easier to manage your finances and keep track of the amount you have left each month to spend on luxuries.
Fixing your mortgage becomes even more important when inflation is on the up. This is due to the fact that the rate of inflation has a bearing on the Bank of England’s base rate decision. The recent inflation rate rise to 4.5% is much higher than the Government’s target, and as such, there is likely to be pressure on the Monetary Policy Committee (MPC) to lift interest rates from their historic low.
Although there is no certainty that the MPC will bow to this influence, a fixed rate mortgage certainly provides a household with stability when rising interest rates are a possibility. Indeed, it is definitely wise to consider avoiding the risk of significant jumps in such a major monthly out-lay by investigating the current fixed mortgage deals on offer. Countrywide provides a mortgage advice and recommendation service and offers a wide range of fixed mortgage products from a panel of well known lenders. Now might well be a good time to speak to an adviser and protect your payments.