Mortgage rates: Five ways to save money.

The Bank of England unexpectedly raised interest rates by more than 0.5 percentage points. As a result, both current mortgage customers and prospective home buyers pay higher rates for their mortgages. The reason behind this decision is to prevent inflation from negatively impacting the economy. By raising interest rates, borrowing becomes more costly, which ultimately reduces loan demand. Consequently, this decrease in demand helps to lower inflation by reducing interest rates.

More than 1 million UK homeowners with a fixed rate will see their deal end by December 2024, according to UK Finance, and these people will face advanced costs when they look to re-mortgage. This can be a daunting thought for homeowners, it is important to shop around to find the best deal. It is recommended to start the search for a new mortgage deal well in advance of the fixed rate ending, to avoid paying a higher interest rate.

There are also a further 1.4 million people on variable rate deals who are likely to see an immediate increase in their yearly payments from another interest rate rise.

UK’s leading mortgage experts have shared tips on managing rising costs.

1. Make money out of your property by listing with a short-term letting point like AirBnB, renting out your parking space with an app like Just Park, or taking in a lessee or overseas pupil, there are several options to make a bit of cash."

Richard Dana says “It is possible to earn up to £7,500 per year tax-free by renting out furnished accommodation in your home through the Rent a Room Scheme. For example, if you earn £5,000 from renting out a room in your house, you won't have to pay any tax on it. This is halved if you share the income with your partner. There is no limit to how much of your home you can rent out.

You could also make your home a film set. Every film and TV drama needs suitable sets, and you can live in any type of property. For your home to make capitalist as a film position. Your home is more likely to be chosen if you live near London.

2. Switch to interest-only still, and you aren't paying down the size of the debt, if you have an interest-only mortgage it means you're only paying the interest on the quantum espoused. Moving to an interest-only mortgage can keep your yearly payments affordable, says Richard Dana, administrator of digital mortgage broker Tembo." Still, it's voguish to use this as a short-term result, else you'll have to pay your remaining mortgage balance at the end of your mortgage term," he adds. Your income and the quantum of equity you hold in the property will determine your eligibility.

3. This is conceivably not a realistic option for a growing family, or for the possessors of a small flat. But for aged mortgage guests whose children have flown the nest, dealing up and buying a lower property could reduce the mortgage size- or potentially pay it off entirely." Consumers looking for a mortgage may find it delicate to go advanced interest rates, so seeking independent advice is essential to consider every option available to them, similar as downsizing," says Rachel Springall from financial data firm Moneyfacts.

4. Extend the mortgage term The typical mortgage term is 45 times, but 30 and indeed 40- time terms are now available." Extending the term can help reduce the monthly payment but can bring knockouts of thousands of pounds more in interest over the life of the mortgage," says David Hollingworth." Make sure that you regularly review whether you could cut the term back again as your circumstances change."

5. "Overpay now if you can, your mortgage could work harder for you if you've got some time left on your low-rate deal." Most lenders will allow up to 10 prepayments per year, but it's best to keep some cash as a stormy day fund as it won't be available to reduce the mortgage," says London & Country's David Hollingworth. Putting a plutocrat in a savings account can make up and earn interest to help to pay down some of the mortgages ahead of fixing a new deal.