Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“The mortgage market has seen relentless rate rises this year, and borrowers coming off a fixed mortgage will find the cost to secure a new deal is much higher than they were perhaps anticipating. This could not come at a worse time amid a cost of living crisis when household budgets are stretched. However, failing to fix and falling onto a standard variable rate (SVR) is unwise, as the average rate has risen to its highest level in over a decade. Fixing for the longer-term may then be desirable, but it is unknown if interest rates will settle, and borrowers find themselves locked into a higher rate compared to new deals surfacing. Choosing the right deal is crucial and seeking advice to navigate the mortgage maze is wise.

“Remortgage customers may find they have more equity in their home due to rising house prices since the start of this year, but first-time buyers may now be facing a difficult time to afford the deposit required to secure a deal. That said, lenders are still offering an abundance of deals both for borrowers with a 5% or 10% deposit, some of which have no upfront fees and include cost-saving incentive packages. It’s imperative these borrowers compare the overall true cost of a deal and attempt to save on the upfront cost if they have used up most of their savings on a deposit.

“Borrowers sitting on a standard variable revert rate (SVR) who want to protect themselves from a rise in mortgage repayments could save thousands by switching to a fixed deal. The difference between the average two-year fixed mortgage rate and SVR stands at 1.16%, and the cost savings to switch from 5.40% to 4.24% is a difference of approximately £3,213 over two years*. A rise of 0.50% on the current SVR of 5.40% would add approximately £1,443* onto total repayments over two years.”

*Average standard variable rate (SVR) is currently 5.40%. Calculations based on a £200,000 mortgage over a 25-year term on a repayment basis.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“The variable rate savings market has experienced a positive period of rejuvenation since the start of the year, but this is largely due to competition in the top rate tables, whereas the back-to-back Bank of England rate rises have yet to be fully embraced by every savings provider, particularly some of the biggest high street banks. Savers hoping to be rewarded for their loyalty will be disappointed that not one of the biggest high street banks has so far passed on all six base rate rises to easy access accounts since December 2021**, which equate to 1.65%. In fact, some have passed on just 0.09%. There are still easy access accounts out there paying less than base rate so it’s imperative savers compare and switch, especially if they have not reviewed their accounts in the past couple of months.

“As we have seen in the past, there is no guarantee that savers will benefit from a rate rise, but they will note a movement in the top rate tables which are dominated by challenger banks and building societies. Considering the more unfamiliar brands is incredibly important, and there is little reason to overlook them if they have the same protections in place as a well-known brand. Amid a cost of living crisis, making regular monthly savings may not be a priority for some, but it’s important consumers have enough money to fall back on to cover any emergencies.”

**Brands considered as the biggest high street banks include Barclays Bank, HSBC, Halifax, Lloyds Bank, NatWest/RBS and Santander. Barclays Bank (Everyday Saver pays 0.15% at £10k gross, up from 0.01%), Halifax (Everyday Saver - pays 0.45% at £10k gross, up from 0.01%), HSBC (Online Bonus Saver - pays 1.39% at £10k gross when no withdrawals made, up from 0.05% and Flexible Saver - pays 0.40%, up from 0.01% at £10k gross), Lloyds Bank (Easy Saver – pays 0.40% at £10k gross, up from 0.01%), NatWest/RBS (Instant Saver - pays 0.40% at £10k gross, up from 0.01%), Santander (Everyday Saver - pays 0.10% at £10k gross, up from 0.01%).