By Marc Hooper — Mortgage & Protection Adviser
If you do nothing when your fixed deal ends, you don’t get a new rate automatically. You roll onto your lender’s standard variable rate, which averaged 7.13% in September, against 5.64% for the average five-year fix.
On a £200,000 mortgage over 30 years, that’s the difference between paying £1,153 and £1,348 a month, roughly £195 extra every month.
If your current deal ends in the next six months, now is the time to start the remortgage process, not wait and see.
The Bank of England held its base rate at 3.75% on 17 September, with the Monetary Policy Committee voting 6-3 against a rise to 4%. The next decision follows on 5 November.
Held or not, fixed rates have kept climbing. Several major lenders, including NatWest, Santander, HSBC, Lloyds and TSB, raised selected rates for the second time this month, with some increases as high as 0.45 percentage points.
The best five-year fixed remortgage rate currently available is 5.25% (plus fees) at 95% loan-to-value, falling to 4.74% (plus fees) at 90% loan-to-value. The lower your loan-to-value, the more those rates favor you.
A held base rate doesn’t mean a quiet market. Fixed rates are priced mainly off swap rates and gilt yields rather than the base rate itself, and both have been climbing.
That’s why deals can move even between Bank of England meetings. Locking in a rate now, then keeping it under review before you switch, protects you against further rises while still leaving room to move if something better appears.
If you switch to a new lender, allow around three months from application to completion. Staying with your existing lender through a product transfer is quicker, typically around a week.
You can lock in a new rate up to six months before your current deal ends, and existing borrowers moving to a cheaper deal don’t usually need a full affordability reassessment under FCA rules. There’s no cost to start early and review your options.
Every remortgage is different. The right move depends on your current deal, your loan-to-value, and what you want from your next one, whether that’s a lower rate, releasing equity, or simply certainty.
Get in touch with Your Mortgage Mate for a free, no-obligation review, and we’ll help you find the right deal before your current one runs out.
