Which? has warned families to brace themselves for pending increases in mortgage repayments if their rate deals end in November, December, or January.

Homeowners moving on from a fixed rate could be paying hundreds of pounds extra on their mortgage during what’s considered the ‘most wonderful’ – but often most expensive – time of the year.

Analysis from Moneyfacts highlights the stark contrast in potential repayments for households. On average, in September 2021, homeowners taking out a two-year fix with 20 years left on their loan would have paid around £770 a month. In today’s market that cost would shoot up to £1,106 – a rise of £336 a month and £4,032 each year.

This is due to rates which would have typically been around 2% back in 2021 rising to – in the case of market-leading Coventry Building Society earlier this year – 5.53% (now around 6%).

Lenders should support customers or ‘expect tough action’

As households continue to battle with the cost-of-living crisis, lenders are being urged to make sure support is in place, so families do not spiral into debt or worse.

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.”

Concerned with repayments?

Here are four tips from Which? if your fixed rate deal is coming to an end.

1. Those concerned about their ability to make mortgage repayments should contact their lender in the first instance – doing so will not affect their credit score.
2. 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 your mortgage. The most suitable option will depend on individual circumstances, so it is crucial that lenders are offering tailored support.
3. Mortgage holders whose fixed-rate deals are coming to an end in April should be able to search for and lock in a competitive rate soon.
4. 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. Companies that fail to do so should expect to face tough action from the regulator.