Martin Lewis is urging every homeowner to act now as cheap mortgage offers disappear

Martin Lewis is urging borrowers to “act now” if they have a fixed rate contract that is about to end or if you have an adjustable rate contract. It comes after the Bank of England hiked interest rates to 1.25%

Martin Lewis has warned of the “disappearance” of cheap mortgage deals after the Bank of England hiked interest rates last week.

The founder of MoneySavingExpert urges borrowers to “act now” if they have a fixed rate contract that is about to end or if you have a variable rate contract.

The BoE hiked rates to 1.25% for the fifth straight day. The key interest rate was 0.1% in December 2021.

Those who have a tracker rate mortgage see their interest rates rise automatically in line with the BoE rate hike.

For those who have an SVR mortgage, lenders typically pass the full rate hike on to you.

You typically have an SVR mortgage deal after your fixed or tracker rate ends — with deals likely to be between 4.5% and 5.5% for most.

Fixed-rate businesses are unaffected by changes in interest rates – but lenders have been slowly making cheap deals in recent months in anticipation of further rate hikes.

“Act now and check whether you can save is a must,” Martin said recently savings expert Founder.

“Lenders re-price new deals weekly, which means today’s interest rates can disappear tomorrow, so delays can be costly.”

How to compare mortgage offers

If you think you’re paying too much on your mortgage, the first thing you should do is ask your current lender if you have the best deal.

Next, use mortgage comparison tools to check if you have the best deal.

We have a guide on how to find the best prices here.

Once you’ve found the best prices on the open market, see how they compare to what you’re currently offering.

If you’re thinking about switching, remember to consider all other costs and see if your current deal has an early exit fee associated with it.

Martin explained that the cheapest fixed rate mortgage deals are currently 2.49% over two years with the Leeds Building Society.

He also announced a fixed rate of 2.74% over five years at Santander and 2.78% over ten years at Lloyds Bank.

This is based on a property worth £120,000 on a mortgage or loan amount of £90,000.

Of course, the actual amount you could save by switching depends on the size of your property, what your mortgage is, and what you’re currently paying.

Interest rates are expected to rise further as part of the BoE’s plans to cool rising inflation rates.

UK inflation climbed to 9.1% in the 12 months to May as the cost of living crisis continues to weigh on household finances.

According to the latest data from the Office for National Statistics (ONS), the CPI was already at a 40-year high when it hit 9% the previous month.