I saw a tweet last week from none other than Matt Lucas - yes, the comedian - sarcastically announcing how much of a ‘treat’ it was to receive yet another text from Barclays bank informing him that his mortgage payments were going up following the interest rate rise on 5 May.
I tweeted back, telling him he should have fixed his mortgage rate (he ‘liked’ it by the way, so maybe he agreed or is thinking about doing just that).
You should have fixed Matt? @RealMattLucas (But in all seriousness, this will hurt many households who are struggling with money atm). #CostOfLivingCrisis https://t.co/QFytq6sxVVMay 6, 2022
But, shouldn’t we all be thinking about fixing? Is it time for homeowners not on a fixed rate to review their mortgage to save money?
While the emergency interest rate cuts back in March 2020, which saw the Bank of England slash rates from 0.75% to 0.1%, was joyful news for those on standard variable rates and tracker rates, those on fixed mortgages were stuck with higher rates.
Fast-forward to 2022, and we are back to rates not seen since 2009, with the Bank of England rate now at 1%.
Banks waste no time passing on the rate increase to mortgage customers - as Matt Lucas has kindly demonstrated to us all - but are not so quick to reward savers. Sadly, those customers usually have to wait weeks to see a rate rise filter through so they can start earning more on their savings accounts.
So, should you fix your mortgage rate and for how long?
There's no easy answer. You could fix for two, four or even 10 years with some providers - or do nothing. Should we see another rate cut in the next year or so, you will have locked yourself into a higher rate. But if rates keep rising, then you may need to act quickly to secure a good deal because they are disappearing.
According to the data analyst Moneyfacts, the average two-year fixed rate is now above 3% for the first time in more than seven years.
As for how long you should fix, well that depends on a number of factors, such as whether you’re planning to move and your affordability.
I’m not a mortgage broker and every case is different, but I would say it is certainly worth speaking to a mortgage broker to see if you can save money by remortgaging to a fixed deal or moving to another deal if you are already on a fixed rate. If you’re six months or less away from your current deal ending, then now’s the time to explore your options, as you can normally lock in a rate in advance of your deal finishing.
Fixing can potentially save you money (sometimes quite a lot of money) - and it can also stop those unwelcome text messages telling you your mortgage costs are going up.
Whatever you decide, the message is to act fast.
Look After My Bills Newsletter
Get the best money-saving tips, tricks and deals sent straight to your inbox every week. Make sense of your money in partnership with The Money Edit.
Kalpana is the Digital Editor of sister site MoneyWeek.
She’s an award-winning journalist and author of Invest Now: The Simple Guide to Boosting Your Finances and a children's book Get to Know Money - with extensive experience in financial journalism. Her work includes writing for a number of media outlets, including national papers and well-known women’s lifestyle and luxury titles, where she was finance editor for Cosmopolitan, Good Housekeeping, Red and Prima.
She started her career at the Financial Times group, covering pensions and investments.
As a money expert, Kalpana is a regular guest on TV and radio; appearances include BBC One’s Morning Live, ITV’s Eat Well, Save Well, Sky News and Channel 5's 30 money saving tips series.
She was also the resident money expert for the BBC Money 101 podcast.
A well-known money and consumer journalist, Kalpana also often speaks at events.
She is passionate about helping people be better with their money, save more and be smarter spenders.
Follow her on Twitter and Instagram @KalpanaFitz.
Three energy firms pay £8m in switching compensation - has your provider paid out?
More than 100,000 customers have received compensation after changing providers, but is now a good time to switch energy suppliers?
By Tom Higgins Published
Save £300 on your supermarket shop with cashback accounts
Banks, credit card companies and cashback sites are all offering cashback on your supermarket shop, but can you use them all to max out your savings?
By Vaishali Varu Published
Moving home: why failing to share your new address could cost you money
When you move home you’ll want to share your new address with family and friends – but being slow to update your contact details with councils, banks and the DVLA can be costly
By Sue Hayward Published
Skipton Building Society to offer deposit-free mortgages for “trapped renters” - everything you need to know about 100% deals
Everything you need to know about how to get a mortgage with no deposit
By Katie Binns Published
Stamp duty: are you entitled to a tax refund worth thousands?
There are plenty of reasons why homebuyers may be entitled to a stamp duty refund, but it’s important to only claim if you’re eligible for a refund (and beware the claims management companies)
By John Fitzsimons Published
House price hotspots: 50 areas where property prices have shot up the most
Which areas have seen the strongest house price growth over the past decade? Discover the towns and locations around the UK where property prices have more than doubled.
By John Fitzsimons Published
Faster mortgage support for Universal Credit claimants – what it means for you
If you claim Universal Credit, you can now get quicker support with paying your mortgage. We look at when you can get it and how to access it
By Stephanie Baxter Published
Should I fix my mortgage rate?
Interest rates are expected to rise again on the back of stubborn inflation, before falling next year. We look at the pros and cons of fixing your mortgage rate and what to consider if you need to remortgage soon.
By Stephanie Baxter Last updated
Selling your home: avoid these mistakes to get the best possible price
From boosting kerb appeal to clearing clutter, there are crucial steps to take to ensure you get the highest price when selling your home
By John Fitzsimons Last updated
Interest rates rise to 4.25% - what does it mean for your money?
The Bank of England has increased the base rate for the 11th time in a row. We look at whether rates could rise further this year, and what the latest hike means for your mortgage and savings
By Ruth Emery Published