Concerned about mortgage rates

[iwonttaketheeasyroad]

Hi, has anyone remortgaged lately? I can't lock in a new deal until September (3 months before current deal due to end) current rate us 1.9% , lowest rate I can see is double that. I know its impossible to tell but that will be even higher by September I would think. Just If anyone else in a similar position?

Don’t wait for your existing lender to let you have a new deal. Most lenders allow 6 months from approval for new customers.

Most mortgage offers are valid for 6 months and you tend to (not always, but more often than not) get a better deal moving to a new lender than getting a new rate from your current one.

Assuming your current rate expires at the end of December, you can apply now, get the offer and sit tight until the beginning of January next year to move on the new rate. Means no worrying about what rates may do between now and then. If rates go up you’re protected, if they were to go down you’re not committed and can find a new rate.

@iwonttaketheeasyroad we are in a similar position and are having to stay with our lender as we are failing affordability elsewhere despite paying the mortgage every month (we have v high childcare costs since our last remortgage). Monthly payments going up £350 I’m terrified.

Is it worth paying the early repayment charge to lock in a 5 or 10 year fixed? We did this a couple of months back and it was worth the initial outlay.

As others have said, ask your current lender if you can lock into a fix rate now that starts in September.

looknto see how much your ERC is, if it's a tapering charge it may not be expensive and you may still save by fixing now.

mine WAS 1.64, it BIT to swap to a 5 year fix at 2.48, but I figured it was worth it considering everything that's going on!

I've just paid the ERC to get out of my fixed rate mortgage of 1.79% (expiring in Mar 2023) and have now got a 10 year mortgage for 3%. I feel very relieved and it should all be paid off by the end of the term as I'm slightly overpaying and only have 11 years left anyway.

Thank you all. I have checked and 3 months early September is the earliest I can lock in a new deal. Rates are going up so rapidly I'm.going to look at the ERC and do the maths to see if worth changing earlier.

You can lock in a new deal 6 months before the end of your current deal if you look at other mortgage providers. Lloyd's, for example, should let you lock in now. There will be plenty others.

I think the feeling is that the base rate will go up, possibly by 0.5%, before September. It is worth looking properly at other providers now.

As someone who remembers interest rates over 10% if it was me I would get the longest fixed rate I could in these uncertain times. Everyone has got so used to low rates. If you look at an interest rate calculator online and see the difference a one or two percent interest rate increase would have it’s quite scary. Plus I like the stability of knowing what my outgoings are each month.

@iwonttaketheeasyroad First Aid Kit?

As others have said, you can lock in a mortgage offer up to 6 months before the end of your current mortgage. I applied to Lloyds in January this year and secured a 10 year fix which actually completed on 5 July, after our ERC expired.

@GretaVanFleet yes!

I'm on it now looking at deals to lock in 6 months before. It's scary how much interest rates have jumped already really

Yep we are. Our fixed deal ends at the end of Jan and we can transfer to a new deal early November. It's stressing me out no end tbh. We are on a tight budget now but managing ok. We could cushion an extra £200, at a push £300 pcm but if it's more than that I am considering interest only with a standing order for whatever we can afford.

I could earn more money as I work freelance and part time so I could work full time, but I need to really sit down and calculate childcare costs etc to see what we may need to do. I am not a worrier at all, but I am right now!

@Ganymedemoon have you looked at other mortgage providers? Lots let you lock in a new deal 6 months before the end of your current one.

Our fixed rate (1.88%) was due to expire in July 2023 but I was so worried about the way interest rates may go that we have paid the early repayment charge and fixed for 10 years at 2.72% - although we are paying more every month (and paid a huge amount for the ERC) I am enormously relieved that we are not leaving ourselves so exposed to interest rate increases over the next year.

The problem we have is I am not sure we would pass affordability. I am now working part time and freelance. Have another child and we now have a loan. So as much as in reality we can afford a little more, on paper it may not look great.

I am looking at paying an ERF of just over £1K and getting a deal now. At least our mortgage is not very large so the ERF is within reach.

@Ganymedemoon we sound to be in v similar financial positions so solidarity!
We tried a broker but didn’t pass affordability so have secured a new deal with our current provider. Having to swallow a £1500 ERPC but have a 5 year fix at 2.94% which would have been hideous 2 years ago but seems a ‘good deal’ now. It will cost us £290 more pcm so will make things even tighter given food and gas and electric are through the roof but at least we know where we stand for 5 years.

It's pretty awful really. When you really feel the very roof over your head is not secure.

I am anticipating paying an extra £200 which we could manage, but yes not £500 plus! Who knows where the interest rates will go to?!

Our current deal ends in November and our lender has just offered us deals to renew on. We’ve bitten their arm off! LTV only 22% which is possibly why they’ve offered it now. Try Martin Lewis MSE website for mortgages, stay away from the big high st ones.

Finance experts saying interest rates will go up to 7% if Liz Truss gets in, to pay for her planned tax cuts. Fix now and fix good!

@Ganymedemoon you could try a free broker just to check that you definitely can't switch lenders?

Good luck with it all.

The next Bank of England rate review is a week Thursday. If you’re going to change provider I’d do it before then as the base rate will no doubt go up another 0.25% (if not more).