Mortgage rates

If you’re on a variable-rate mortgage, the best way to protect yourself from rising rates is by moving to a fixed rate.

In many cases, this is likely to be the sensible option as you can lock into a lower rate for two, three or even five years. You can simply choose the right plan for your needs.

Typically the best fixed-rate deals are quickly withdrawn by lenders if there is the hint of an interest rate rise. And for that reason, you'll usually need to act fast. But always tread carefully before making any move to check what fees might apply.

While you shouldn’t face early redemption penalties for leaving a standard variable-rate mortgage, there could be an arrangement fee when moving to a new fixed-rate deal. Also remember to factor in expenses such as valuation and conveyancing fees.

If you are currently on a fixed rate, it pays to be prepared. If you’ve got less than six months to run, you can secure a new mortgage deal now in advance. Don’t wait for your deal to expire.

When choosing a new fixed rate mortgage, you might want to consider a longer-term fix of five or even ten years, for example.

But beware of fixing for longer than you are comfortable with. It’s hard to predict what life will look like a decade from now and there might be early-exit penalties if you want to move house or restructure your loan within the fixed rate term.

There is no single ‘best’ mortgage deal at any point in time. The best rate you can get will depend on your financial circumstances and the mortgage rates available at the time. The Bank of England Bank Rate will have a big impact on this.

That said, lenders may choose to offer low rates from time to time in a bid to win new business. That’s why it’s so important to research carefully by shopping around to compare mortgages both on rates and fees. This gives you the best chance of finding the most suitable product for your needs.

There is no hiding that this is a tricky decision, especially in the current climate.

With the general consensus that rates are likely to drop over the next 12 months, if you fix now you could lock into a deal that's more expensive than those that are expected to come to market in the medium term.

Conversely, if you decide to opt for a new fixed-term mortgage contract, you’ll have the certainty that you’re paying a set sum every month with no surprises.

Something else you may want to take into consideration is whether your current plan comes with an early repayment charge.

If that’s the case, it might be worth waiting until the end of your fixed-term plan. This is true if the early repayment charge is particularly high.

Not only that, but you’ll also need to factor in any potential sign-up fee, which you’ll need to pay to secure and confirm your new deal.

So, what should you do? Ultimately, the choice is yours. But MoneySuperMarket is here to guide you every step of the way and help you identify the mortgage deal that best works for you.

Unfortunately, the answer is yes. This can happen at any time, even after contracts have been exchanged and completed.

In this scenario, you’ll need to source another suitable deal and restart your mortgage application process from the outset.

This might include affordability and eligibility checks, such as reviews of your history and credit score, which will allow lenders to pinpoint a new mortgage offer. Bear in mind that the new offer may come with a different interest rate.

With MoneySuperMarket, you can browse an array of mortgage options and choose the one that best suits your needs and pockets.