Expats should note!

If you are sheltering from rising interest rates within the safety of your fixed rate, you may also be feeling a little nervous about what will happen when your deal ends.

Last week’s hike in interest rates to 1.25% came amid warnings the base rate could rise further to as much as 3% by the end the of the year.

Though no one has a crystal ball, and there’s no guarantee our mortgage rates will soar by this much, the predictions are leaving many homeowners feeling a mixture of concern and vulnerability.

Will these rates continue rising into 2023 and 2024? How will this play out for fixed rate deals due to expire in the next couple of years?

At the moment, lenders are increasing the rates on their mortgages to keep up with the Bank of England’s base rate increases.

This is not only the case for tracker and variable mortgages but also new fixed rates. So, anyone re-mortgaging onto a fixed rate deal now will be looking at average rates of around

What should we do to avoid being hit by mortgage rate increases?

If your mortgage is due to expire in the next six months, re-mortgaging now is an option. This is because most lenders will keep your offer live for six months. Therefore, if you were to fix your deal at today’s rates you may find they are much cheaper than November or even December’s average rates.

If your deal has longer than six months remaining, and you are due to re-mortgage in 2023 or even 2024 you may feel resigned to the fact you will eventually – when you come to re-mortgage – be hit with a much higher rate.

But there are some options for you to consider.

Overpaying your mortgage could take the pressure off future rate rises

Would re-mortgaging early help offset potential interest rate rises?

One option some borrowers with mortgages due to expire in 2023 and beyond may be considering is exiting their deal early and re-mortgage now.

However, caution to anyone considering this avenue, not least because most fixed rates carry an early repayment charge (ERC) throughout the period which will become chargeable if you switch to a new lender or deal.

Essential, get independent advice.