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Fixed-Rate Mortgage Deals

With many people struggling with the cost of living situation, it may be hard to think about what to do if your fixed-rate mortgage deal ends this year.

There are two types of mortgage rates.

The first type is a variable rate or trackers loans. This type of mortgage payment is immediately affected by the Bank of England's interest rate. When the Bank of England increased its benchmark interest rate, the monthly repayment of a mortgage will rise. On average, a homeowner has seen an increase of £400 on their mortgage, then in December 2021.

The second type is a fixed-rate mortgage. This is when a homeowner will take out a deal with a lender, to pay a fixed monthly payment for a certain length of time. When this deal ends, the lender will move the homeowner on the standard variable rate mortgage, which has a rate of 7%-8%, which is considerably more expensive. At the moment the best rates for fixed-rate mortgages are 4%, whereas a couple of years ago the best rate was 1%.

In September 2022, the interest rate for mortgages increased massively from what it was in December 2021. . The rate has dropped from what it was in February, but mortgage payments may still be significantly higher than what they were before.

Lenders usually let you secure an offer within six months of the end of your current deal. It generally takes at least four weeks to complete a mortgage offer. Leave it too late and you could end up paying the more expensive SVR for a period between deals.


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