A survey conducted by Censuswide on behalf of Comparethemarket polled 2,023 mortgage holders and found 89 per cent of homeowners whose deal will end soon said they were worried about rising rates pushing up their mortgage payments. Additionally, nine in 10 had concerns this would impact their ability to pay household bills.
The survey found that 71 per cent of respondents will remortgage when their fixed term ends. However, 15 per cent do not plan to, meaning they will move on to their lender’s standard variable rate (SVR).
A quarter of those surveyed were not on a fixed rate mortgage deal and of those, 16 per cent are already on an SVR.
According to L&C Mortgages, partner of Comparethemarket, the average SVR of the top five banks was 5.44 per cent as of 7 October, which is currently lower than the average fixed mortgage rate of six per cent.
Fixed rate certainty
Respondents recognised the benefits of being on a fixed rate mortgage with 55 per cent saying it provided certainty over repayments and 48 per cent saying it protected borrowers from future rate rises.
Alex Hasty, director at Comparethemarket, said: “We understand it is an uncertain and difficult time for many homeowners, as SVR and fixed term rates rise, the number of mortgage products fluctuates, and the cost-of-living crisis deepens. Those soon coming to the end of their fixed rate deal are likely to face a big repayment shock, even if they’re remortgaging.
“For these homeowners, it is best practice to remortgage rather than switch onto your lender’s higher SVR. It’s important to compare mortgage products online – checking the available deals now and staying aware of what is happening in the market will help you to prepare your budget and save for the future.”
