Warning to 'lock in better deal' on mortgage now as payments to surge up to £1,380 a year
Mortgage rates are set to rise again in the coming weeks
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Mortgage holders have been urged to "lock in" if they want to avoid a surge in repayment costs.
The amount paid could increase by at much as £1,380 a year as the Bank of England looks to hike up interest rates once again.
Now financial experts are suggesting Britons consider getting a fixed rate mortgage to avoid the squeeze in the months to come.
They have warned that while remortgaging to get a fixed term rate will likely see an increase in monthly payments, the rise will be nothing like the hike coming down the line.
House owners on variable tariffs will see their monthly repayment costs surge
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Tim Leonard, personal finance expert at NerdWallet, said: “The recent upheaval in the mortgage market will affect many existing borrowers, as well as first-time buyers.
“But those whose deals are due to come to an end will be paying a close eye on rising interest rates and higher mortgage repayments when negotiating their next deal.
“It remains to be seen if interest rates will come down sharply anytime soon, but some lenders have slightly lowered their rates recently. If a fixed rate mortgage is coming to an end, the choice is usually between moving to the lender’s standard variable rate or remortgaging."
Speaking to the Express, he added: “Choosing a standard variable rate could be the simple option, but it may not necessarily be the best one.
“Standard variable rates are set at the discretion of the lender and tend to be higher than other mortgage rates.
“A way to potentially lock in a better deal is by remortgaging, but borrowers should be aware that they'll probably be looking at higher rates than they’d been paying before.
“Many mortgage offers will last for up to six months, so once a rate is locked in, borrowers will have the chance to assess the market and see whether a better value deal comes along before committing.
“With interest rates generally not as favourable as they were a year ago, borrowers should shop around to find the best mortgage deal for them.”
Interest rate hikes mean that anyone owning a property worth £400,000 a year will risk paying an additional £1,380 a year.
The Bank of England will decide on interest rates later this month
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The Bank of England's Monetary Policy Committee, which sets the base rate of interest, is next due to meet on March 23.
Earlier this week the Bank's Governor, Andrew Bailey, signalled at plans to increase rates again.
"Too little with interest rates now, we will only have to do more later on," he warned.
“Some further increase in Bank Rate may turn out to be appropriate, but nothing is decided.”