There is currently lots of uncertainty about the future of interest rates, how high they will go & what impact this will have on household finances and mortgage payments.
No one has a crystal ball & if we did every decision we made would be the right one, but in a rising interest rate environment we do know that our future mortgage payments will be higher when we are needing to re-mortgage or switch to a new product with the same lender.
Assuming you are not on the lenders Standard Variable Rate (SVR) & you are on a fixed rate mortgage, you will be able to make over payments of 10% of the outstanding mortgage balance each year without any penalty fees & this is a fantastic option you should utilise if you can.
Any overpayment you make towards your mortgage balance will go directly to the outstanding capital & NOT towards the interest & because of this you can substantially reduce your mortgage balance over the years with regular overpayments, taking years off the overall mortgage term in the process.
To get an idea what what you will pay when you come out of your current fixed rate mortgage you can use our mortgage calculator on our website Mortgage calculator – Capital Mortgage UK to give you an idea of what your future payments will be, you can change the interest rate and this will give you different monthly payment outcomes.
The average fixed mortgage rate has increased from below 1.5% 8 months ago to just over 3% today for a 2 years fixed rate product.