Mortgage brokers are urging borrowers to fix their mortgage repayments in the wake of the US Federal Reserve decision to increase interest rates.
The Fed increased rates for the first time in more than nine years on Wednesday, by 25 basis points to 0.75%.
Jeremy Duncombe, director Legal & General Mortgage Club, said the rate increase suggests a "positive outlook" for the US and global economies and will affect future UK interest rate decisions.
“The Monetary Policy Committee is likely to take this decision into consideration at their next meeting, which could be seen as an incentive for the UK to follow suit sooner rather than later.”
Duncombe said it is crucial that homeowners act now to secure a low rate while they’re still available.
“The improving economy has already prompted lenders to increase their fixed-rate products over the past few weeks and today’s news from the US provides further evidence in support of this decision."
Duncombe added: “Many will never have experienced a rate rise and may be unaware of the impact one could have on their finances, making it vital that they now consider the prospect and effects of a future rate rise.
“Our research has shown that by remortgaging sooner rather than later, monthly repayments could be reduced by almost £350.”
Rachel Springall, finance expert at Moneyfacts, said borrowers could see their monthly tracker or variable rate repayments "soar" if the UK follow suit. "We may even find lenders reduce the market by withdrawing deals.”
She said there is great choice of deals right now. “Two-year fixed rates today can be as low as 1.14% while five-year rates can be found at 2.19%.
“Borrowers should therefore check out the market and evaluate the true cost of deals to find a cheaper and more cost-effective option before rates start to creep up.”