Back in March, mortgage broker Michael Lawlor told us the volatility wasn't over and that any fall in rates wouldn't be a smooth ride. Six months on, he's been proved right: rates have dipped, then sharply reversed, as inflation worries, geopolitics and the bond markets pushed swap rates back up. His key reminder for borrowers: fixed rates don't just follow the Bank of England. Lenders price on their own funding costs and where they think rates are heading, so your rate can rise even when Bank Rate doesn't. We went back to Michael for a quick update on what to do now.
The number that matters: the 2021 roll-off
A big wave of borrowers are coming off the ultra-cheap five-year fixes they locked in 2021, when rates were around 2.5–3%. Michael's example: a £200,000 repayment mortgage over 30 years at 2.63% costs about £800 a month. At today's ~5.6%, that jumps to around £1,150 — roughly £350 more a month, or over £4,000 a year. “It demonstrates the scale of the payment shock some households are facing,” he says, “and why planning ahead of the fixed-rate expiry is so important.”
Two-year or five-year fix?
There's no one-size-fits-all right now. A five-year fix gives certainty and protects you if rates stay higher for longer — good if you want predictable payments and don't want to gamble. A two-year fix gives flexibility, and can suit someone with enough headroom to cope if rates don't fall quickly and who thinks pricing might be better in a couple of years. “I'd rather see someone choose a term based on their circumstances and attitude to risk,” Michael says, “than try to perfectly time the market.”
Product transfer or remortgage?
Staying with your lender — a product transfer — is often simplest if nothing's changed, you don't need to borrow more, and their rate is competitive. But convenience isn't the same as best value. A full remortgage can win if another lender is meaningfully cheaper, you need to borrow more, or their criteria fit you better. “The key is to compare both options on the overall cost,” he says, “not just the headline interest rate, because fees and incentives can make a meaningful difference.”
The most common mistake right now
“The biggest mistake I'm seeing is people waiting for certainty” — holding out for a Bank of England cut, or assuming rates must fall further. But mortgage pricing moves independently of Bank Rate, and nobody can reliably call the next move. Michael's advice: put yourself in a position where you don't have to guess. If your deal is ending, look early, secure a competitive rate when it makes sense, then keep watching — if rates improve you may be able to switch, and if they rise, you're already protected.
The takeaway
- If your fix ends within six months, start looking now — you can usually lock a rate early and still move to a better one if the market improves before completion.
- Choose your fix length around your own circumstances and risk appetite — not a prediction about where rates go next.
- Compare a product transfer against a full remortgage on total cost, not the headline rate.
Connect with Michael
Michael Lawlor:
Mortgage Advice Bureau
This article is for informational purposes only and does not constitute financial advice. Always seek independent mortgage advice before making decisions about your home or finances.