MILLIONS OF FIXED-RATE MORTGAGES ARE ENDING. DISCOVER 6

Practical Steps You Can Take Now

Over the last year, interest rates have increased from historic lows. Fixed-rate mortgage payers that have been shielded from the rises so far could find their outgoings rise if their deal ends in 2023. 57% of fixed-rate mortgages ending have an interest rate below 2%

Data from the Office for National Statistics suggests that 1.4 million households will need to renew their mortgage deal this year.

Among the fixed-rate deals coming to an end, 57% have an interest rate below 2%. It’s unlikely you’ll find a new mortgage deal that has an interest rate this low. If your mortgage deal is ending, being proactive can help you prepare for the potentially higher costs. 5 practical things you should do if your fixed-rate mortgage ends in 2023

• Review your budget: Take some time to understand what rising interest rates will mean for you. Being prepared means the hike in your mortgage outgoings won’t be unexpected.

• Decide if taking out a new mortgage deal is right for you: While it can be tempting not to take out a new mortgage deal if there’s nothing comparable to your current one, you could end up paying more. Once your current deal ends, you’ll usually be moved on to your lender’s standard variable rate (SVR). This rate isn’t usually competitive, and you could save money by taking out a new deal.

• Decide what kind of mortgage is right for you: Interest rates may continue to rise over 2023. So, you may choose a fixed-rate deal again. This would mean that your repayments could not increase during the term. However, if interest rates began to fall, you wouldn’t benefit.

In contrast, with a variable- or tracker-rate mortgage, the interest rate could rise and fall. Which is right for you will depend on your financial circumstances and priorities.

• Set out the mortgage term: Usually, each time you remortgage, the term falls. However, this doesn’t have to be the case.

You may choose to shorten or extend how long you’ll be paying the mortgage. If the cost of living crisis means your budget will be stretched, choosing a longer term could provide more flexibility and lower initial repayments but will mean the overall cost of borrowing is higher.

• Search for deals early: You can often lock in a new mortgage deal up to six months before your current one ends. Searching early means you can avoid paying your lender’s SVR while you find a new deal and it gives you more time to find a suitable option for you.

Please contact us on 01273 774855 or email advice@pembrokefs.co.uk if you would like more information and quote reference PFSIS.

Your home or property could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home.

Relf & Keith Bonner - Managing Partners