Steve Opie, Director of Finance, Spectrum Independent Financial Advice

What should I do about the mortgage on our office building following the recent rise in interest rates?

The Bank of England announced a rise to the exchange rate from 0.25% to 0.50% at the beginning of November – the first we’ve seen in 10 years. While some might argue that this small increase was only reversing the “emergency” decrease in August 2016 to stabilise sterling in the wake of the Brexit vote, the likelihood is that from now on, the only way is up.

So after a decade of ultra-low interest rates, it could be a wise move to prepare for a gradual rise by reviewing your current mortgage. If you are on a fixed rate already then there’s less urgency, although it’s always a good idea to review your terms and have a look around to see if you can get a better deal.

If you are on a variable rate, then now is an ideal time to consider a fixed rate mortgage. While you may end up fixing on a slightly higher rate than you are currently paying, you would have peace of mind knowing exactly what you need to budget for each month. Lending is still a very competitive market, so there are plenty of good deals to be had. However don’t leave it too long, as once lenders start to pass the rate rise down to the consumer, there could be a general rise in mortgage rates across the board, particularly if the Bank of England makes a second increase in the coming months.

You may want to seek advice from an independent financial adviser who specialises in commercial mortgages. They will help you to find a deal that best suits your business and support you through the application process.

To get in touch with Steve, please call 0800 195 1066 or email steve@specifa.co.uk. For more information visit www.specifa.co.uk

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