If your mortgage rate is due to expire, this is for you.
Do not allow your rate to default to the Standard Variable Rate (SVR), which tends to remain high, regardless of changes in the interest rate environment. Recent news are creating urgency to take action now.
Recent Forecasts
The Bank of England has warned that approximately 4.4 million households will face higher repayments over the next three years. In 2025, an estimated 1.8 million UK households will see increased mortgage costs due to changes in interest rates or economic conditions. According to data from Moneyfacts (moneyfactscompare.co.uk), Standard Variable Rates (SVRs) are currently averaging around 7.81%, which is significantly higher than other mortgage types. In comparison, the average interest rate for a five-year fixed-rate mortgage is 5.25%, while a standard two-year tracker mortgage stands at 5.47%.
What steps should you take?
It is key that you review your mortgage rate in advance to avoid paying unnecessarily high rates. By doing so, you will have time to make any necessary arrangements and switch your mortgage type without hassle. When exploring your options, it is advisable to seek professional advice to ensure you are securing the best deal, taking into account both interest rates and any additional charges.
Why are tracker rates being considered a more cost-effective option?
Some people believe that tracker rates are the way to go at present.
A tracker rate a type of variable interest rate for mortgages or loans that moves in direct relation to an external benchmark, typically the Bank of England base rate (or another central bank's rate).
If you believe we are near or at the peak of interest rates, then a tracker rate could be a smart option, especially for those with a flexible budget. While fixed-rate mortgages offer stability and predictable monthly payments, tracker mortgages allow borrowers to benefit from potential rate decreases. For those comfortable with some variability in repayments, a tracker mortgage may provide significant savings.
The best place to start?
Sort out your budget to determine what you can afford, and then speak to a professional advisor who can scout the entire market for the best deal tailored to your circumstances.
Lux Mathiy
0333 34 44 34 8
The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.
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