Expert Explains Why Fixed Mortgage Rates May End Before Two Years
A reader has reached out to us with a question about her two-year fixed mortgage, which is ending after only 18 months. This raises concerns for many homeowners who are unsure of their rights and options when it comes to mortgage rates. To address this issue, we have enlisted the help of David Hollingworth, associate director at L&C Mortgages, to provide some insight and advice.
Fixed mortgage rates are designed to lock in a specific interest rate for a predetermined period of time. This period is usually divided into two, three, or five-year terms. Once a borrower agrees to a fixed mortgage rate, the terms cannot be changed by the lender and the rate cannot be ended early.
Some lenders may offer fixed rates that are tied to a specific end date, while others may specify a set number of years from the completion of the mortgage. In the case of the latter, the fixed rate may last longer than two years from the date the application was made. This is important to keep in mind, as the process of completing a mortgage can often take longer than anticipated, especially when there is a lengthy chain involved.
It is advisable for borrowers to review their original mortgage offer, which will outline all the details of the product. This will specify when the fixed rate ends and what rate the mortgage will revert to afterwards. In most cases, this will be a higher variable rate, so it is important to start looking for a better deal well before the fixed rate ends.
A broker can be a valuable resource in helping borrowers explore their options and find the best available rates, whether from their current lender or from the wider market. It is always wise to shop around and compare rates to ensure that you are getting the best deal for your individual circumstances.
