For most mortgage borrowers, the sensible thing to do has been to fix your mortgage product and rate for a certain period of time. Most lenders will offer products that you can fix for 2, 3, 5 or 10 years. Fixing your mortgage rate means that you will have confidence that your monthly mortgage payments will stay at a consistent rate for that period of time without any unexpected rate increases.
Once your fixed rate finishes, most people who have vigilant mortgage advisors will have already transferred their mortgage or remortgaged to get a new fixed deal. Some people opt for a tracker mortgage that follows the rate imposed by the Bank of England and can increase or decrease. And some unlucky people come off their fixed product without the help of a mortgage advisor to secure a new deal and end up stuck on the lender’s high variable rate.
Recent figures released by the research team at comparethemarket.com have shown that 55% of home owner’s fixed mortgages will come to an end within the next 3-years. That means that 55% of homeowners will need to start considering what they want to do in regard to arranging a new fixed deal rather than falling onto the banks high SVR product.
The data from comparethemarket shows that from speaking to a test group of mortgage owners, 89% coming to the end of their fixed rate deal are concerned about rising interest rates and their mortgage payments increasing, 90% of these people are concerned about being able to keep up with everyday bills if their mortgage payments increase.
71% said that they intend to remortgage when they come to the end of their fixed term deal to get a bit more security on their loan, despite rising interest rates. Surprisingly, 15% said that they are planning not to remortgage and fine with dropping onto the lender’s higher standard variable rate.
The data does however show that of those surveyed by comparethemarket, 25% are not on a fixed-rate mortgage currently. Of these, 16% are on an SVR already, meaning these borrowers are risking paying a higher interest rate.
Alex Hasty from comparethemarket has said:
“We understand it is an uncertain and difficult time for many homeowners, as SVR and fixed-term rates rise, the number of mortgage products fluctuates, and the cost-of-living crisis deepens. Those soon coming to the end of their fixed rate deal are likely to face a big repayment shock, even if they’re remortgaging.”
If you are coming to the end of your fixed rate mortgage deal within the next 3 years, we strongly recommend that you give our team a call so that we can help you to plan for the future. Feel free to give our team a call to see how we can help.