round half a million fixed mortgages are set to end either in the run-up to or just after Christmas, potentially giving homeowners a payment shock at what is often the most expensive time of the year, Which? is warning.
The consumer group pointed to Financial Conduct Authority (FCA) figures indicating that more than 500,000 fixed-rate mortgages will come to an end in November, December or January.
Average two-year fixed-rate mortgages are currently above 6%, according to data from financial information website Moneyfacts.
But Which? said that some of those who had previously fixed their deal in December 2021 could have got a rate below 2%.
Some homeowners moving onto new mortgages could end up paying hundreds of pounds more each month compared with their previous deal.
The rock-bottom interest rates homeowners enjoyed for more than a decade are firmly behind us
Data from the FCA also suggests another spike in mortgage deals coming to an end next spring, with over 180,000 homeowners set to come off fixed-term rates in April, Which? added.
It said that, amid expectations that the Bank of England base rate could rise again on Thursday, for the 15th time in a row, it is unlikely that homeowners whose deals are ending in the coming months will be able to find deals at anywhere near the rate they have been previously paying.
Homeowners whose fixed deals are expiring by the end of the year should be looking at new deals and how they will affect their finances now, Which? suggested.
Mortgage holders can generally lock in a rate up to six months before their current deal expires, and can pull out of that deal should they find a better rate elsewhere.
Which? is also urging banks to ensure they are ready to provide appropriate support to customers. That means firms should ensure that their customer service support – via phone calls, email and chat support – is properly staffed and resourced, including during the Christmas holiday period.
Those concerned about their ability to make mortgage repayments should contact their lender in the first instance – and doing so will not affect their credit score.
Support could include a temporary mortgage holiday, temporarily paying only the interest on the mortgage (and not the capital repayment), or extending the term of the mortgage. The most suitable option will depend on individual circumstances.
People should also bear in mind that extending the mortgage term or going interest-only for a period may mean that they end up paying more money to their lender in interest charges over the longer term.
The FCA’s new consumer duty, which holds firms in financial services to higher standards of customer service, should mean that customers are supported in a way that meets their financial needs, Which? said.
Reach out to your lender if you are struggling with your finances
Ele Clark, senior money editor at Which?, said: “The rock-bottom interest rates homeowners enjoyed for more than a decade are firmly behind us, and those who need to remortgage are feeling the full force of the last two years’ worth of rate rises.
“With more than half a million mortgage-holders’ fixed-rate deals coming to an end in the next few months, it’s vital that lenders are offering adequate and fully resourced customer support to help borrowers assess their options.
“Under the new consumer duty, firms must support their customers throughout the term of their mortgage. If they don’t, we’d expect them to face tough action from the regulator.”
Eric Leenders, managing director of personal finance at UK Finance, said: “Christmas can really stretch household finances. All lenders have teams of experts ready to help anyone who is worried about their mortgage and, as usual, there will be a moratorium on possessions to ensure that people stay in their homes over the festive period.
“Reach out to your lender if you are struggling with your finances – there’s a range of support available that your lender will tailor for your specific circumstances.
“Forty-seven lenders representing over 90% of the market have also signed up to the Government’s new mortgage charter, providing even more help for borrowers when they need it.”