Getting to grips with rising mortgage rates as self-employed professional

If you’re wondering why mortgage rates are rising so much at present, you’re in precisely the right place. Read on and discover the five things you need to know about skyrocketing mortgage rates in 2022.

Getting approved for a home loan is a momentous step for many independent professionals. But it’s not a step that comes without stress. A mortgage is a massive ongoing financial commitment with a fair few strings attached, and these strings can change shape, size and colour with the economic seasons.

freelancer concerned about interest rates

Generally speaking, mortgage rates are high when inflation is high and lower when inflation drops. Right now, they’re sky high. Lenders across the board are increasing their rates on BOE base rate tracker and variable rate mortgages, affecting 1.9 million mortgage holders (plus a further 1.3 million on fixed rate plans due to end in 2022).

The most recent round of these increase took place on the 4th August 2022, which saw the base rate rise by 0.50% to 1.75%.

Whether you’re on the path towards a property purchase or already tied into a mortgage, here are some crucial pieces of information you’ll need to navigate rate rises effectively and realistically.

The economic context

How did we get here? That’s a question many in your boat will be asking, and many financial experts will attempt to answer. It’s a complex mix of factors, but it can most primarily be pinned down to:

  • The UK’s exit from the European Union (Brexit)
  • The negative financial and cultural impacts of the COVID-19 pandemic
  • The Russian war on Ukraine and subsequent energy embargos

The country has been hit hard financially in the past few years, to the point where we now find ourselves in a cost of living crisis. Utility bills are at record levels, groceries are more expensive than ever, and though they’re doing so on a less steep curve, property prices are continuing to rise.

When prices and costs rise, inflation rises. And when inflation rises, financial institutions take action to curb inflation by raising interest rates (including the Bank of England base rate). This is where your mortgage, whether existent or hypothetical, comes into play. Like any other loan, your home loan is subject to interest and impacted when interest rates jump.

The 5 essential things you need to know about mortgage rate rises

For your ease of understanding, we’ve broken down the most critical pieces of information surrounding mortgage rate rises. You need to know that:

1. Every lender is introducing changes

Starting in June and extending to August, pretty much every major mortgage lender is raising their rates by 0.25%. That includes Barclays, First Direct, HSBC, Lloyds Banking Group, Nationwide, Santander and TSB. It will be impossible to avoid increases if you have a variable rate mortgage.

2. Fixed rate mortgages are in demand

With rates rising and the apparent potential for further increases on the horizon, many mortgage holders and applicants are thinking long term and seeking to switch to or plump for a fixed rate deal. This way, they’ll know exactly what they’re getting (and that it won’t suddenly change) for a set number of years. 

3. There’s a case to be made for waiting it out and a case for buying now

Some say the property market will bear out the cost of living crisis. Others predict a crash that might make now the wrong time to buy. Ultimately, the future is impossible to predict with 100% certainty, and the final decision will come down to you and your circumstances.

4. We can’t be sure how long rates will rise or what’s coming next

There’s no set, standard amount of time it takes for a period of inflation to come to an end. But most experts agree that interest rates will keep rising until at least 2024. This isn’t a situation with a short-term fix, and it’s certainly not a situation that’ll be fixed before the end of the year.

5. Considering the broader impact on your business is essential

It’s obviously crucial to understand how rising rates will impact your mortgage, but you should also be sure to consider (and plan for) how your business might be affected. Communicate with clients/customers. Ensure that your services/products aren’t on the chopping block if their budget is pinched.

For more advice, guidance and expertise, reach out today. Our not-for-profit membership community was created to help self-employed professionals access every possible opportunity.

CMME is a leading Contractor Mortgage specialist, dedicated to supporting Britain’s freelancers, contractors and self-employed professionals – ambitious, enterprising people like you who’ve backed themselves to make their own way in life.

IPSE members receive a £50 Amazon voucher when taking out a mortgage with our partner CMME.


IPSE Partner, CMME, is a leading Contractor Mortgage specialist, dedicated to supporting Britain’s freelancers, contractors and self-employed professionals – ambitious, enterprising people like you who’ve backed themselves to make their own way in life.


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Meet the author

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Simon Butler

Head of mortgages and protection, CMME