Find out how you can prepare for interest rates rises

The hike will mark the 11th rise in just less than a year, seeing mortgage customers worry again as base rates continue to rise, making borrowing more expensive. 

However, there is a way to prepare for the increase and to make sure you're not hit too hard. 

Which? has shared their top ways to help prepare from checking your finances to overpaying your mortgage. 

Seven ways to prepare for interest rate rises

Check what impact it will have on your finances

Anyone on a tracked mortgage will feel an impact on monthly repayments if interest increases. 

According to Which? you'll want to check how much you can afford to pay back each month and if it will change your short-term income. 

Adding that if you finish a fixed-term deal you'll be met with double or triple the costs you are currently paying when remortgaging. 

It is important to get advice and to speak to a lender about what support options there are. 

Work out what deal suits you

If you are close to remortgaging or are buying a property you will want to check the type of mortgage you're buying. 

As Which? says "With interest rates potentially rising – and the future mortgage market being hard to predict – a sense of security could be appealing. That's why fixed-term deals are taken by the majority of homeowners, as mortgages aren't impacted by interest rate hikes for the duration of the term. The most popular terms last for two, five and 10 years."

pounds (Image: Canva)

Check to see if it's worth overpaying your mortgage

One way to beat the impact of interest rates is to slow down the cost of your loan.

Doing so by overpaying on your mortgage could save you thousands, as it will increase the equity in your property. 

Therefore allowing you to benefit from your lower interest rates when getting a new deal as it'll be of a lower loan value. 

Meaning that there will be less of your mortgage that you need to pay back in the new deal.

Double-check your lender's SVR

Those whose fixed rate or tracked deal ends will be moved to lenders SVR automatically, meaning interest rates will be higher. 

Rates can be increased at any point, so before this happens you will want to lock in a new deal for up to six months in advance. 

Be quick to get the best deals

If you are in the process of buying a property or renewing a mortgage you will want to be quick to grab a deal before prices increase. 

According to Which?: "If you sign up to a new deal a number of months in advance, be sure to check the provider's terms."

Adding: "If you spot a better offer elsewhere before the new mortgage deal starts, some lenders allow you to switch to a cheaper offer right up until you officially remortgage, while others won't allow you budge."

Would switching mid-deal save you money?

In some cases, it might be worth switching in the middle of a fixed deal, so that you can secure a deal before base rates rise. 

You will have to factor in that you might have to pay early repayment charges that could be higher than expected on your mortgage. 

But if you work out the maths then you should save money by switching. 

Get a better credit score

Mortgage repayments are influenced by credit ratings, anyone with a bad credit score will pay a higher price if interest increases. 

Ahead of the rise you can improve your credit score by doing little things like updating your address, correcting mistakes and joining the electoral roll.

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