Homeowners with fixed-rate mortgages ending soon face difficult decisions after a week of turmoil in the homeloan market.
This week mortgage lenders began pulling deals, with around 3,000 removed from sale. Others are hiking rates.
House sales are also starting to fall through as lenders pull mortgage offers in reaction to the mini-Budget.
Anyone looking for a fixed rate mortgage faces higher prices and fewer choices than even a few months ago.
Defaqto consumer banking expert Katie Brain said: " Within the space of a week we have seen some dramatic changes within the mortgage market.
"Nearly 3,000 mortgage products have been withdrawn, and over 20 providers have withdrawn their entire fixed rate mortgage range.
"What products are left are changing at a rapid pace, lenders seem to be really unsure of what to offer and what price with so many changes in the money markets at the moment."
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Image:
Bloomberg via Getty Images)Lenders are pulling home loans from sale because they can't predict what's happening next, or what mortgages should be priced at.
If even mortgage experts can't predict what's happening next, it is doubly difficult for homeowners whether it is better to take out a new fixed rate deal now, or wait and hope rates are lower in a few months.
All Brits can do is make the decision that seems best for them in the moment. Always speak to a mortgage broker or advisor to get individual help.
If price is a factor - and you want certainty over how much you'll be paying - then locking into a deal soon may make sense.
That is because base rate, which is factored in to the price of mortgages, could hit 6% next year - although this is just what analysts are predicting right now.
Swap rates, which also affect the cost of fixed rate mortgages, are also rising.
Ms Brain said acting now is important for people with mortgage deals that are ending soon.
She said: "Interest rates on best buys for five-year fixed rates have not increased as much as the two-year fixed rates (yet), so if you are someone who is on a variable rate and are looking to fix, or coming to the end of a current deal then now is the time to act as interest rates are changing daily."
Many mortgage lenders let you lock in a new home loan rate up to six months before your current one ends.
But be careful of exit penalties, which lenders can charge if you leave a deal early.
Hargreaves Lansdown senior personal finance analyst Sarah Coles said: "If you have six months or less to run on a fixed rate mortgage it’s worth shopping around for a new rate, because you can lock in a deal up to six months in advance and protect yourself from rises."
It is also crucial to make sure you've explored all options.
Again, that means speaking to a mortgage broker, as well as seeing if you can get a better deal by approaching a lender directly.
Coles added: "Given the market turmoil, you may want to talk to a mortgage broker who is across the market and can track down the best rates."
But Ms Brain said: "Many of the best rates are only available direct through a lender so it is worth contacting your existing lender, or bank you have other accounts with, to see what they have to offer.
"We can only hope that the situation calms down soon, so at least borrowers can seek alternative mortgage deals should they need to.”
Another thing to consider is that switching early means taking a bet on what mortgage rates will be in the future.
MoneySavingExpert founder Martin Lewis said: "While it looks like they [rates] are going to be far, far higher in future, if there's anything the past few years has taught us, it's that unknown unknowns could flip that around at speed. There are no guarantees, and without a crystal ball, we don't know how much rates will rise by.
"If this is something you're considering, we'd push you to speak to a mortgage broker, who'll can run you through the pros and cons to see if it's worth it."
