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What Next For Mortgage Rates in 2023? (QUICK GUIDE)

Worried about mortgage rates?

You’re not alone. Families up and down the country are struggling to keep their heads above water with interest rates at a record high. But should you fix your rate now, or wait and see what happens next? 3 people looking at mortgage paperwork

We know, it’s not an easy decision to make. That’s why we’ve put together this handy guide on what to expect from mortgage rates in 2023 – which may make your decision a little bit easier.

Note: This is just a point of view and not financial advice. Please consult your financial advisor before making any decisions.

What's Gonna Happen?

The short answer is: we don’t know. Mortgage rates are determined by a number of factors, including the Bank of England base rate, which is currently at 3.0%.

This rate is the highest rise we've had since November 1989, and it's unlikely to change any time soon. So, if you're on a variable-rate mortgage, your payments are likely to increase in the next few months (if they haven't done already.

Unfortunately, it's not just existing mortgage holders that are affected. It also affects first-time buyers and people looking to remortgage.

>> If you are a first-time buyer, there is help over at which has some great guides on how to get on the housing ladder.

What Does This Mean for You?

The main thing you need to consider is whether you can afford the increased payments.

If you're on a tight budget, you may want to think about fixing your rate. This way, you'll know exactly how much your mortgage repayments will be each month.

Martin Lewis from Money Saving Expert recommends that if you're on a variable-rate mortgage, you should start looking into fixing it as soon as possible. He says:

"If your mortgage deal's up soon, or you're thinking of remortgaging, my strong recommendation is that you switch to a fixed rate now."

He also advised those that are currently on a fixed-rate mortgage to find out when their fixed rate comes to an end and start making preparations.

"What you will absolutely need to be prepared for is you need to know the date when your fixed rate mortgage is going to end. I would start preparing three to six months before that happens and looking at what you can do then."

Fixed-rate mortgages

It is now extremely hard to get a new fixed-rate mortgage and if you can get one, expect that the rate will be quite high.

Shopping around for the best deal and using websites like Money Supermarket can help you to find the best rate for your circumstances.

If you are on a fixed-rate mortgage, it's important to remember that this doesn't mean your payments will never go up. If the Bank of England base rate increases, your lender may pass this on to you at the end of your fixed period.

So, if you are thinking of fixing your mortgage, make sure you factor in any possible rate increases.

Tracker mortgages

Tracker mortgages do exactly what they say on the tin. They track the Bank of England base rate and your payments will go up or down depending on what happens to the base rate.

If you're on a tracker mortgage, it's worth considering switching to a fixed-rate deal now. This way, you can be sure of how much your repayments will be each month.

Why Are Rates Going Up?

The Bank of England (which controls the rates) believes we are currently going through high inflationary pressure. This is caused by the pandemic as well as the Brexit transition period coming to an end.

In order to combat this inflationary pressure, the Bank of England has several three times in the last few months – and they are expected to raise them again in the next few months.

Also, the uncertainty around the Ukraine war with Russia has led to investors selling their stocks and shares and buying government bonds instead. This has pushed up the price of government bonds, which in turn pushes up mortgage rates.

The Going Trend

With so much uncertainty, you will likely find that households up and down the country will start fixing their mortgages more than ever.

This will help to give them some financial stability in an uncertain time and ensure that they don't get caught out by any potential rate rises.

If you are thinking of fixing your mortgage, now might be the time to start looking for the best deal.

You may not get another chance for a while.

2, 3, 5, 10 years — or longer? How long should you fix your mortgage for?

This is a great question and not one that can be answered lightly.

It depends on your circumstances and how much risk you are willing to take.

If you want to play it safe, you could opt for a longer fixed period. This way, you know your payments won't go up for a while, no matter what happens with the base rate.

However, this does mean that you could miss out on any potential rate cuts.

If you are happy to take a bit more of a risk, you could opt for a shorter fixed period. This way, you could benefit from any potential rate cuts but your payments could go up if the base rate increases.

The best thing to do is to speak to a mortgage advisor who can help you to find the best deal for your circumstances.

Getting Help With The Cost Of Living

If you do find yourself in a bit of a pickle, there is help out there. You should check if you are able to claim any benefits that you are entitled to.

There is also help available if you are struggling with your mortgage payments. The government has a number of schemes in place to help people who are struggling financially.

Your first port of call should be the citizen's advice bureau which will be able to give you impartial advice on your situation.


Just remember, we are not financial experts and this article is not to be taken as financial advice. Please speak to a mortgage advisor if you are thinking of fixing your mortgage.

Mortgage rates are currently on the rise but there is help available if you are struggling to keep up with your payments. The best thing to do is to seek professional advice to see what options are available to you.

Wishing you all the best in these uncertain times.

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