Monthly mortgage payments could increase for millions of UK households.
The Bank of England raised interest rates, meaning Brits could pay more with a property if they took a variable deal.
But it’s also a problem for borrowers who are at the end of their fixed-term mortgages.
When interest rates rise, mortgage lenders pull their cheapest deals, which could mean your monthly repayment can go up.
What some Brits don’t know, however, is a little-known trick that could save you a fortune.
Many homeowners can get out of their fixed-rate mortgage early.
Typically, mortgage providers will let you sign a new contract three months or about six months before your current contract ends.
People might be looking for a new price (Image: Getty Images/iStockphoto) Read more related articles Read more related articles
This means homeowners can now secure the best rates before rates rise.
David Hollingsworth, associate director at L&C Mortgages, said people should act sooner rather than later.
He said: “Many mortgage offers from lenders are valid for up to six months, which means you can apply for a deal now.”
According to L&C, the average interest rate on two-year fixed-rate mortgages has tripled from 0.89% to 2.71% since October last year.
And in the past month alone, the average two-year fixed rate has risen from 2.36% to 2.71%.
These rate hikes could have a big impact on your monthly repayments.
If you have a £150,000 mortgage with a term of 25 years and an interest rate of 2.75%, your monthly repayments would be £693.
However, with an interest rate of 3.25%, your repayments would increase to £731, almost £460 more per year.
It comes as interest rates have risen (Image: Getty Images/EyeEm) Read more related articles
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To find a new mortgage offer, you might look around to find another provider that offers a better deal.
A mortgage broker can help you with this process.
They scour the entire market and recommend you the best mortgage deals.
Usually, the mortgage term is 25 years, but you can opt for a 30 or even 40 year mortgage.
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