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Tailored mortgage borrowing for the longer term

fixed rate mortgage sticky note on a calculator

The Office for National Statistics estimates that over one million fixed rate mortgage deals will end in 2023. With that in mind, we advise that homeowners don’t delay in seeking advice to secure the best alternative.

Why choose a fixed rate mortgage?

Your mortgage payments stay constant with a fixed-rate regardless of fluctuations in the Bank of England base rate or your lender’s standard variable rate (SVR). They protect borrowers from sudden, large hikes in mortgage payments if interest rates increase.

When is a good time to fix a mortgage?

In recent years, two and five year fixed rate deals have been the most popular. UK inflation and interest rate uncertainty makes long-term mortgage repayment plans attractive for some borrowers.

Deciding how long to fix for

Typically fixed-rate mortgages last two, three, five or 10 years. However, some lenders do offer longer fixed-rate mortgage terms. Fixing for ten years could largely benefit those with at least 40% equity in their existing property.

Those in this position could expect a lower fixed interest rate. This offers security if rates fluctuate, which looks to be likely in the next couple of years.

Who are fixed rate mortgages suitable for?

1 year fix1 year is the shortest amount of time that mortgage interest rates can be fixed for. Fixed terms of this length are very rare and typically come with more expensive rates than other products.
2 year fix2 year fixes are popular. They offer stability for people with no immediate plans to move and are often cheaper than a 5 year fix.
3 year fix3 year fixed rate terms are ideally for those who want to stay where they are for now but intend on moving in the next 3-5 years. They tend to be more expensive than 2 year fixes but cheaper than 5.
5 year fix5 year fixed rates are also popular. These types of fixes are good for people who intend on staying in their property for the medium to long term future but expect their situation to change in the future.
10 year fix10 year fixed rates are suitable for those who are planning to stay in their home for the foreseeable and would like to budget for the long term.
Longer than 10 yearsIt’s very rare that lenders will offer a fixed term longer than 10 years. Talk to us if you feel like this is something you need to consider.

Planning for the longer term requires a degree of certainty about future plans:

  • Is the present property suited to family and employment prospects without the need to move?
  • Are there likely to be any issues around future nearby development or infrastructure improvements that could impact your desire to remain where you are?

Think about these things and speak to your local authority to find out about development plans.

What happens at the end of a fixed-rate?

When your fixed-rate mortgage comes to an end, you will be moved to your lenders standard variable rate (SVR). Typically, SVRs are the most expensive mortgage type. If you’re thinking about leaving a fixed-rate mortgage early, think about how this may affect you financially.

How to get the best fixed-rate mortgage deal?

To get the best out of a remortgage, you should start planning around 6 months before the end of your term. Planning in advance can help you to avoid extra payments. You can use our mortgage affordability calculator for a rough estimate of your current affordability.

Can a mortgage broker help?

As mortgage brokers, we specialise in advice. Our teams have special access to lenders and their mortgage products, designed to suit borrowers specific needs. Speak to one of our specialists today.

Despite doom-laden headlines predicting falling house prices, any change will be modest and short lived. This is due to demand remaining high, and the financial sector is now so well regulated to avoid buyers over-extending their personal financial position.

In fact, experts predict up to one million home sales this year. This is prompted by stability rather than an urgency to beat rising prices, which escalated during the pandemic.

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