52% of homeowners with a fixed, tracker or discount mortgage are on deals that need to be renewed within the next two years, according to new research from The Mortgage Lender (TML).
Of those whose deals are coming to an end within the next two years, 55% are on two-year fixed rate deals and 39% are on five-year fixed rate deals.
While the Bank of England tries to curb the rate of inflation, its recent run of rate hikes could ultimately mean that many homeowners are left to face increased costs when they do come to renew their mortgage.
Consumers are prepping for hikes in their mortgage costs, with the research finding a quarter (25%) of those with a mortgage are expecting their mortgage costs to rise. Among those that expect their mortgage rates to rise in the next two years, the average they expect their monthly mortgage payments to rise by comes to £441. This surges among 18-34 year olds, with those who expect their mortgage rates to rise by £689 per month in the next two years.
The research also found that 25% of overall homeowners are currently on fixed term mortgage deals, with 15% on five-year fixes and 10% on two-year fixes. Mortgage borrowers will therefore be weighing up their options on whether to lock in a new deal now or to sit tight and see what the Bank and mortgage rates do next.
Steve Griffiths, Head of Sales at The Mortgage Lender, comments: “Mortgage borrowers will continue to keep a keen eye on the Bank of England’s base rate decisions over the coming months to see how it could impact their future borrowing costs. A mortgage is one of the biggest financial commitments an individual can make, so weighing up whether to fix now or not can be a tricky decision to commit to.
“Fortunately, many borrowers are getting on top of potential increased costs by speaking to their mortgage broker to help find the best deals for them. Borrowers can review their deals as early as six months in advance of them coming to an end, so assessing what options are available now is certainly a sensible move. Brokers can offer invaluable support and guidance as consumers try and navigate the market and can help provide a holistic view of what deals are most suitable for clients before rushing into any decisions.”