According to recent figures from the Office for National Statistics (ONS), over half of the people who need to remortgage this year are coming off their two-year fixed-rate mortgage deal, which was fixed at around 2%. This equates to 1.4 million homeowners looking at higher monthly mortgage repayments.
The average repayments for someone with a £100,000 will now be around £220 higher today than it was two years ago, and this rises to £661 for anyone with a £300,000 mortgage.
In the first quarter of this year, it is estimated that around 353,000 fixed mortgage deals are due to end, and this rises to 371,000 in the second quarter. The rest will come up for renewal in the third and fourth quarters.
Of those with a mortgage ending this year, 86% of them are on a fixed-rate deal. In 2016 this figure was just 51%.
The Office for Budgetary Responsibility provides an independent analysis of the UK’s public finances. It has predicted that the Bank of England base rate will rise to 4.8% in the second half of this year before falling back down slightly the following year.
Although we have had a tumultuous six months with negative stories around mortgage rates, the cost of fixed-rate mortgages has fallen for the past two months. In the wake of the autumn statement in November following the mini budget in September, the costs to lenders to borrow money have come down. The average two-year fixed rate mortgage is now 5.79%, according to financial information group Moneyfacts and 5.63% for a five-year fixed rate. The average cost of a standard variable rate mortgage is currently 6.64%.
Those looking for a good mortgage deal on their existing property should act now as most deals are only available for 15 days before lenders pull it, down from 28 days in January 2022.
Renters, they are also facing increased costs as rent has seen the fastest growth since 2016. Over the last 12 months, rents have increased by an average of 4%, and, at present, average rental payments account for 24% of renters’ weekly expenditure, compared with 16% for those with a mortgage.
Clyde Property is a leading independent, multiple award-winning estates and letting agent with more than 30 years of experience in selling and letting property in Scotland. Call your local Clyde Property branch today, for friendly, impartial advice on finding your next dream home.
