Is it possible to lock in a cheap rate now until fixed deal ends?

houmie

Hello,

The following paragraph in this article caught my attention:

Even if you are currently on a fixed-rate mortgage, where the fixed period isn't due to expire for another 6 months, it is possible to lock in a cheap rate now, which will start when your current fixed deal ends, avoiding any early redemption charges from your existing lender.

I'm currently on a fixed rate with HSBC until 31.01.2023.  I can change the rate from 05.10.2022 without having to pay any additional fees.

Going back to that paragraph above, how can I lock in a new fixed rate now, which will start when my current fixed deal ends?

I asked this question to my mortgage broker and got this answer, which is not as clear cut. 

Rates aren't reserved at principle stage, but at full application- we'd then present products that once issued (subject to the full underwriting process) would be valid for completion on February 1st so the new deal kicks in once your fixed rate ends, as arranged by the conveyancer. 

 Does it simply mean I need to apply for an available product and be accepted, right?

I wonder if I should simply pay the £1000 early exit fees, and simply switch the product within HSBC. But could I in this case borrow less and pay up a bit more of my mortgage as it's done during remortgaging? 

Thanks,

PawelK

Hi. 

My fixed deal ends in October. I tried one of the free brokers mentioned on this website and they got me a deal back in June which lasts for six months. Once I got my offer from the bank, I agreed and started the process with them with the completion date 1st November to avoid ERCs.

Right now the rates are more than 1% higher than what I locked in so if everything goes well, I'll be happy when November comes and won't be crying over leaving my current lender.

If you speak to the broker, they will be able to recommend the best rate available right now that will last until after your fixed rate deal ends. 

london21

houmie said:

Hello,

The following paragraph in this article caught my attention:

Even if you are currently on a fixed-rate mortgage, where the fixed period isn't due to expire for another 6 months, it is possible to lock in a cheap rate now, which will start when your current fixed deal ends, avoiding any early redemption charges from your existing lender.

I'm currently on a fixed rate with HSBC until 31.01.2023.  I can change the rate from 05.10.2022 without having to pay any additional fees.

Going back to that paragraph above, how can I lock in a new fixed rate now, which will start when my current fixed deal ends?

I asked this question to my mortgage broker and got this answer, which is not as clear cut. 

Rates aren't reserved at principle stage, but at full application- we'd then present products that once issued (subject to the full underwriting process) would be valid for completion on February 1st so the new deal kicks in once your fixed rate ends, as arranged by the conveyancer. 

 Does it simply mean I need to apply for an available product and be accepted, right?

I wonder if I should simply pay the £1000 early exit fees, and simply switch the product within HSBC. But could I in this case borrow less and pay up a bit more of my mortgage as it's done during remortgaging? 

Thanks,

If you want to stay with HSBC then you will have to wait till the date 05/10/2022 there is a rate increase due now 22/09/2022.postponed by a week.

If you are moving to another lender then the offer will be valid for 6 but earliest you can start the mortgage without a charge is when your mortgage expires date 31/01/2023 they won't allow October without paying ERC. 

csgohan4

I locked in my rate the day it was 6 months before my deal finished in march  and just completed last week. Thank God I did, as it is now more than double looking at current figures.