Couple paying bills on laptop bad credit debt

How to prepare for a rise in mortgage rates

It’s likely your mortgage rate will rise at some point before your debt is paid off.

The mortgage rate offered to you will depend on:

  • The type of mortgage you choose
  • Your lender’s commercial considerations
  • Economic conditions in the UK
  • Your financial circumstances

If any of these factors worsen during your mortgage term, there’s every chance your mortgage rate will rise.

The best way to protect yourself against this is to choose a fixed-rate mortgage, but you’ll pay more for the security of a long fix, plus the longest fixed-rate deals on the market are capped at 10 years.

At this point, you’d still have to remortgage to find a competitive deal and there’s no guarantee you’ll be able to find a similar rate.

As such, it’s important to have a contingency plan to prepare for a mortgage rate rise.

How can we help?

L&C Mortgage Advice

Speak to an adviser

Talk to a fee-free mortgage adviser from our partner L&C. Open 7 days a week, 'til 8pm weekdays. Call free (mobile or landline).

L&C Online Journey

Online mortgage finder

Complete our form to access personalised information on mortgages to suit your particular needs.

L&C Compare Rates

Browse mortgage rates

Fast and simple comparison of today’s best rates and overview of mortgage options from a range of UK lenders.

Why do mortgage rates rise?

The interest rates offered on all financial products are largely based on the Bank of England (BoE) base rate.

This rate, decided by the BoE’s Monetary Policy Committee, is what banks charge when lending to each other.

The committee will raise interest rates when it judges public spending levels to be too high for a sustainable economy. This makes it more expensive for consumers and businesses to borrow money, thus slowing down spending levels.

If the BoE rate goes up, banks pass the extra cost of borrowing from each other onto customers via rate rises across all products, including mortgages.

With tracker mortgages, the mortgage rate automatically follows the BoE rate, but banks tend to manually alter all other mortgage rates to reflect it too.

If your mortgage rate is fixed for a specific time period, it’ll remain the same regardless of BoE base rate rises. However, you’ll be moved onto your lender’s standard variable-rate afterwards and this will typically be a lot higher than what you were paying.

Remortgaging and rising interest rates

Many homeowners choose to remortgage as a fixed-rate deal comes to an end. At this point, you’ll go through affordability and credit checks similar to what you faced when buying the house.

As such, your rate will once again be subjected to the whims of:

  • The type of mortgage you choose
  • Your lender’s commercial considerations
  • Economic conditions in the UK
  • Your financial circumstances

This is the same as was when you were first buying the house.

How to prepare for mortgage rates rising

As you can see, in certain economic conditions, there’s little you can do to stop your mortgage rate rising. However, there are steps you can take to prepare for it:

  • Borrow sensibly. If your mortgage repayments already tend to stretch your budget, a slight rise in interest rates could tip you over the edge. By arranging a smaller mortgage in the first place, you give yourself more wiggle room if rates do rise.
  • Have plenty of money stored in savings accounts. If fluctuations in savings rates mirror changes in borrowing rates (which they often do), the extra interest you earn will cancel out your additional mortgage interest.
  • Fix your mortgage rate at the right time. It’s extremely difficult to accurately predict the future of the UK economy, but those with a basic understanding of economics can save a lot of money by fixing their mortgage before interest rates rise.
  • Remortgage with a longer term. This will lower the size of your monthly repayments, although you’ll pay more interest overall and it’ll take longer to become mortgage-free.
  • Overpay on your mortgage. By overpaying while your rate is low, a rate rise won’t be as damaging, because you’ll be paying interest on a smaller amount of debt. However, overpaying on your mortgage is only a sensible strategy if you have no other debt. You should always pay off debt with the highest rate first and mortgage debt tends to be cheaper than credit cards/personal loans etc.
  • Work on improving your credit score. Mortgage applicants with a good credit score can access the best rates in any economic conditions.

*Disclaimer: The offers compared on this page are chosen from a range of products whose details Finder has access to track; they don't represent all the products available in the market. Unless indicated otherwise, products are displayed in no particular order or ranking. The terms "best", "top", "cheap" (and variations) are not product ratings and are subject to our terms of use. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site