Should I fix my mortgage?

With mortgage rates continuing to rise despite the government’s recent mini-budget U-turn, every property owner is feeling the squeeze right about now. A predicted housing market slowdown is raising fresh concerns for homeowners with many worrying that they may struggle to keep up with mortgage repayments as interest levels creep up to a 15-year high.

Sharply rising mortgage rates have stopped many buyers from proceeding with their purchases and left existing borrowers in limbo, particularly as hundreds of mortgage products were withdrawn from the market in recent weeks. So, what now?

Fixing your mortgage could provide the assurance you need during these difficult times, but is now a good time to fix and how can you get the best deal when remortgaging?

Is now a good time to fix?

For borrowers with mortgage types that are standard variable rate or discount variable rate, the time to fix is as soon as possible. Staying on a standard variable rate during these tough times as rates continue to climb will only leave you out of pocket.

If your fixed-rate mortgage is coming to an end, even months from now, shopping around for a new deal is recommended. Many lenders allow you to secure a new deal at the current rate up to six months in advance, meaning if the mortgage rates continue to rise as predicted you could make significant savings.

What if my deal isn’t ending soon?

If your mortgage deal isn’t ending soon, it is possible to switch but this comes at a price. Remortgaging your home early could leave you with many charges to pay, including legal, valuation and early exit fees. Early exit fees are charged as a percentage of the loan, so the longer you have left, the more you’ll have to pay.

What’s the ideal time frame to fix for?

Whilst the predictions are pretty grim for forthcoming mortgage rates, knowing how long to fix for is a very big dilemma. Fixing your mortgage for a longer period of time could mean that you pay more if mortgage rates drop back down. Fixing for a shorter period, however, may not provide the affordability you need when your deal comes to an end if mortgage rates continue to rise.

The launch of 10-year deals is now giving borrowers the chance to fix for an entire decade to counter rising mortgage rates! Here Which? explains why fixing for 10 years may not be the best option, especially if you need to end your deal early:

“Longer-term fixes usually come with early repayment charges (ERCs), which you’ll need to pay if you want to get out of the mortgage during the fixed term – for example, if you want to switch deal or move home. Commonly, ERCs are charged on a sliding scale – so you might need to pay as much as 5% if you cancel your mortgage in the first year, or at little as 1% in the final year.”

How can I get the best-fixed deal?

Getting the best-fixed deal for your circumstances is as simple as contacting us for support. Our independent advisors are here to help you secure the best product when remortgaging so you can reduce your costs, enjoy more flexibility and harness better financial certainty for longer.

Get in touch with our team to find the right mortgage deal for you.

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