Mortgage Rate Uncertainty: If Your Fixed Rate Is Coming To An End - Should You Remortgage Now?

Over the past few days, we have seen a sharp shift in financial markets, and it is likely to impact mortgage pricing. If you are due to remortgage in the next 3–6 months, this matters more than you might think. 

Tensions in the Middle East, particularly around the Strait of Hormuz, have pushed oil prices higher almost overnight. Around 20% of the global oil supply moves through that route. When markets fear disruption, energy prices jump. And when energy prices jump? Inflation expectations rise.

Markets had been pricing in Bank of England rate cuts with growing confidence. But as highlighted in recent coverage of the Spring Statement, that confidence has been shaken. The probability of an imminent rate cut has fallen sharply in just a matter of days. That shift has consequences.

Why This Affects Your Mortgage 

Mortgage pricing does not just move when the Bank of England makes an announcement. It moves when markets expect the Bank to act. SONIA rates, which underpin many tracker and swap-linked mortgage products, respond to those expectations. When bond yields rise and swap rates climb, lenders reprice. 

We are already seeing short-dated gilt yields jump, swap rates move higher, and expectations for rate cuts pushed back. That feeds directly into new mortgage pricing. 

The Risk of Sitting Tight 

Until very recently, we were hearing the same message: “Rates will come down soon, I’ll just wait”.  

Now, though, that may no longer be the case. 

If oil-driven inflation proves stickier than expected, the Bank of England may keep rates higher for longer. And if that happens, the competitive deals available just weeks ago may disappear.  

If You Are 3–6 Months from Remortgaging?

1.8 million people are expected to remortgage this year.  

Most lenders allow you to secure a rate up to six months in advance. That gives you valuable protection: If rates rise, you could be nicely locked in to your lower rate. If, however, rates fall, you can usually switch to a newer lower rate before completion.

There is limited negative implications to securing an option now. However, there are potentially greater downsides to waiting.

We have moved from “rate cuts are coming” to “maybe” and even in some circles “rates are now likely to increase” – all in the space of a week. 

Geopolitical shocks do not just affect headlines; they also affect your mortgage. 

If you are due to remortgage this year, especially in the next few months, start the conversation now with us, and you may save money on your mortgage payments. 

Contact me today, and let's get started.

Lux Mathiy  

Penn Financial  

0333 34 44 34 8  

hello@pennfinancial.co.uk  

Penn Financial 

The information provided in this article is not intended to constitute professional advice. You should seek comprehensive legal, accountancy, or financial advice regarding your situation from a qualified Solicitor, Accountant, or Financial Advisor/Mortgage Broker before taking any action.