Remortgaging: What if your mortgage rate goes up?
How changes to your mortgage rate could affect you
Your monthly payment can change when interest rates change if your mortgage is a variable rate of interest. If the Bank of England rate increases, your monthly payment will also increase.
Variable rate mortgages are Standard Variable Rate (SVR), Tracker and Discount products.
If you have a fixed rate mortgage the interest rate, your monthly payments will stay the same until the end of the fixed rate period. Once your fixed rate period ends, your mortgage will revert to a Standard Variable Rate.
What to do if my fixed rate is coming to an end?
If your fixed rate is coming to an end, you can look to find a new fixed rate and secure a new rate in place. Some lenders will allow you to secure a product in place up to 6 months before your current one is due to the end.
Can I switch to a fixed mortgage rate?
This will come down to your individual circumstance – you will need to check how long you have on your current product and what the Early Repayment Charges are.
If you’re not sure what to do in regard to your current mortgage and Early Repayment Charges, speaking to a broker like ourselves, we will be able to advise you on what we believe is the best thing for your requirements.
You can look to switch to a fixed mortgage rate and secure a rate for a specific amount of time such as for 2 or 5 years.
Therefore, if rates were to increase again, your monthly mortgage payment won’t increase and you will continue to pay the same amount each month until your fixed period ends.
How can a 1% increase could change your monthly repayments
If the interest rate was to go up by 1%, your mortgage payments would go up by approximately £8 for every £10,000 remaining on your mortgage.
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Speak to our team about remortgaging
Additionally, our team can also advise on first time buyers mortgages, home movers mortgages, buy to let mortgages and bridging loans.