Do you know when your fixed rate is up and how much you stand to lose on your lender’s variable rate? If you haven’t a clue then you’re not alone! Lenders are coming under scrutiny for failing to notify their customers when they reach the end of their fixed term mortgage deal.
When your fixed term ends
As you know, when your fixed term ends you automatically move on to the provider’s variable rate. This has led to borrowers losing out on savings totalling nearly £1.6 billion each year! The research carried out by U Switch found that 77% of borrowers had not been contacted by their lender when their fixed rate deal had ended.
There is wide assumption that the lender’s variable rate is only slightly higher than the fixed rate which is why some people don’t place a great level of importance on getting back on a fixed rate quickly. The truth is, the lender’s variable rates are typically more than double the rate of a fixed rate. This is a rather significant amount of money which could make a big difference to household finances and lifestyle!
What is the impact of a fixed term ending?
What is alarming is that the U Switch report estimates around 2.1 million UK homeowners are currently on a fixed rate mortgage which will expire in 15 months. 32% of these will not know what their payments could be when their fixed deal ends.
Also concerning is the looming interest rate rise which economists have said could come as early as November, this will bump up mortgage rates and it becomes even more vital to remortgage and secure a new fixed deal when your current one expires.
Have you received notification of your fixed-rate ending?
Research suggests that 8 out of 10 mortgage borrowers have not ever considered a remortgage in the last two years. Less than a fifth of the same group are happy with their mortgage lender and only 5% say they feel loyalty towards their lender. Probably because they have not informed them of their fixed rate ending! Lenders are missing a trick because they could secure a long-term customer from borrowers if they notified them of their fixed-rate deals and how much their customers could save.
Experts are calling for legislation to be written which will ensure their customers are notified not only when their deal is coming to an end but the effect slipping onto the variable rate could have on their finances.
How we can help
Until then, if you’re concerned about keeping on top of your fixed rate product ending then contact us. We offer a free, no obligation reminder service. So even if your lender forgets to remind you that your fixed rate is ending, we will let you know and offer our expert advice in finding an excellent remortgage deal saving you time and money.
Contact Us to set up your reminder either by email info@numberonemortgages.co.uk or on 01273 736536.