Brexit property news: Will mortgage rates go up after Brexit?

by ace
Brexit property news: Will mortgage rates go up after Brexit?

Today´s Deals

Boris Johnson's Brexit bill passed Parliament last week, paving the way for the country's exit from the European Union. Let's take a look at how things can change after January 31st.

Will mortgage rates rise after Brexit?

After January 31, the United Kingdom will enter the so-called "transition period".

This will ensure that the country remains in the EU and follows its rules, despite having no representation in EU institutions.

The transition period ends on 31 December 2020 and was developed to facilitate the UK's exit from the EU and to give the government time to negotiate trade agreements and the terms of the UK's future relationship with the bloc.

After Britain leaves the EU, trade negotiations with the bloc are expected to begin almost immediately.

SEE MORE INFORMATION: Will house prices fall after Brexit? Or will house prices rise?

If interest rates go up, mortgage rates are likely to go up too, which would affect people who do not do fixed rate transactions.

These people will see your mortgage rate stay the same until it runs out.

For those on a variable rate mortgage, payments will increase as interest rates rise.

If interest rates fall, it is good news for people with a variable rate or who wish to remortgage, while those who practice a fixed rate will not benefit from the change.

With the uncertainty surrounding Brexit now over, the housing market can see the upward trend since the conservative election victory continues.

Buyers and sellers who were postponing a decision until the return was certain could now be prepared to make them.

Mortgage providers would be competing to offer consumers the best rates.

With the low mortgage rate potentially continuing, it would be a good time for loans.

After Brexit, changes could be made that will stop the country from adhering to the EU Mortgage Credit Directive (MCD), which was introduced in 2016, and is a European legislation that created a structure of standards of conduct for those who sell residential mortgages

The directive was blamed for creating "mortgage prisoners" – people who were locked up in terms of mortgages and whose circumstances later changed, leaving them stuck in the initial terms.

This leaves them paying more and stuck with their ISP, as they cannot pass an accessibility test with other banks.

After Brexit, MCD legislation could be changed by the government.

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