With the next UK Budget scheduled for 26 November, homeowners whose current fixed mortgage deal is ending within the next six months face an important decision. You might lock in a rate now, giving you peace of mind and protection against potential rate rises, while still keeping the option to switch later if rates improve.
Below, I’ll walk you through why acting now makes sense, show what happened last time a major fiscal event spurred mortgage pain, and explain how to approach this proactively.
Why locking in now can be a smart move
If your mortgage deal is expiring soon (within six months), consider this:
- Budget risk: When the Chancellor delivers the Budget, markets and mortgage lenders often respond. Policy surprises — tax changes, borrowing shifts, spending tweaks — can ripple through to interest rates.
- Rates under review: By locking in now you secure today’s rate, but you don’t have to give up flexibility. If rates fall later, you can revisit or remortgage.
- Avoid being caught off guard: If you leave your decision until after the budget, you’ll be in a vulnerable position — potentially subject to higher rates or less favourable offers.
As recent commentary points out, almost a million UK homeowners whose fixed deals end in the next six-months have been urged to act ahead of November’s budget to “hedge against uncertainty”. The Times
What that means for you – and what you should do
If your fixed mortgage term ends soon (or will in next six months), here’s a suggested action-plan:
- Check your renewal date: When does your current fixed deal end? If within the next six months, you’re in the range to act ahead of the budget.
- Speak to MPC Mortgages now: Ask what fixed-rate deals you could lock in today, compare options, and understand penalty or break-costs (if any) for switching later if rates go down.
- Lock in a rate with flexibility: Some lenders let you reserve or “lock” a deal ahead of your exit date (up to six months) — so you’re protected against rises but retain flexibility.
- Monitor: Leave that to us. Knowing you have arate secure is great but if they do start to come down we will keep an eye on the rates and let you know if a better one becomes available making what we secure now the worst case scenario.
Let’s talk about THAT budget
Let’s look at what happened under Liz Truss (Prime Minister) and Kwasi Kwarteng (Chancellor) in September/October 2022 and how mortgage borrowers paid the price.
- On 23 September 2022 the government announced a growth plan full of unfunded tax cuts and spending promises. Wikipedia+2The Guardian+2
- The result: financial markets spooked, gilt (UK government bond) yields soared, the pound collapsed, and lenders reacted. According to the data:
- Over 40% of mortgage products were withdrawn from the market within days. Wikipedia+1
- Typical two – and five -year fixed mortgage rates leapt – one report showed average two-year rates hitting ~6.65% by 20 October. Reuters+2The Independent+2
- The fallout lasted many months: higher rates, fewer products, more uncertainty for households.
The key lesson:
When the fiscal/spending environment changes unexpectedly, mortgage markets can move fast and that means borrowers who are due to fix (or re-fix) soon may get blindsided.
Why Now…
- Budget timing matters: With the Budget on 26 November, any big policy announcements (taxes, borrowing, spending) could rattle markets. This could happen quickly and we have seen before lenders make changes prior to the budget in anticipation.
- Your six-month window: If your fixed deal ends within six months, you fall into the “at risk” category. Those borrowers are being advised to act ahead of the budget. The Times
- Buffer vs upside: Locking gives you the buffer of protection. If rates fall, you can still switch; if they rise, you’re safe.
- Avoid repeating the 2022 scenario: In that case the “surprise” budget spooked markets and fixed-rate borrowers paid the price. Waiting cost many thousands.
- Peace of mind: Knowing your rate is locked means you’re not watching every economic headline wondering if your next repayment will soar.
Final Word
If your fixed mortgage deal is coming up for renewal within the next six months – don’t wait until after the Budget. By acting now, you can secure a rate, give yourself options, and protect yourself against the budget-driven surprises that lenders and markets might respond to.
Looking back at the Truss/Kwarteng episode clearly shows how a fiscal shock can translate into sharp mortgage rate rises and thousands of pounds of extra repayments. By being proactive this time around, you give yourself the best chance to avoid being caught off guard.
Contact us now to have a chat over the options.