Everyone with a mortgage is being warned about a change to mortgage terms for customers of Halifax, Lloyds, Santander and Nationwide.
Each lender has made a change to their mortgage rules which changes the amount of time a borrower can secure a fixed rate at a guaranteed price before their current mortgage deal runs out.
Many households across the UK are coming to the end of their fixed rate terms and for some coming off long fixes, the new mortgage rates could be a shock, as historic lows of 1-2 percent have made way for rates of around 5 percent right now, albeit this is down from highs of 6-8 percent two years ago.
Those coming to the end of their fixes are usually advised to start shopping around up to six to eight months before their current deal ends in order to plan ahead for any possible rate changes.
Costumers can get an AIP (Agreement In Principle) from a lender which it is then guaranteed to honour, even six months later. The upside is that you don’t have to go through with the mortgage, so you could ditch it at the last minute for something cheaper if the market rate goes down, but you can guard against price rises with the guaranteed deal.
Unfortunately, banks Halifax, Lloyds (which is the same banking group), Santander and Nationwide are all changing their AIP period from six months to just four months.
The change will take effect from February 1, 2025 for Halifax and Lloyds and Santander and Nationwide already changed theirs in June.
It means that prospective mortgage or remortgage customers will have less time covered by the guarantee, so if prices rise, you’re less likely to be able to protect against it.
A spokesperson for Lloyds Banking Group said: “Our approach offers homeowners both the certainty of selecting a new mortgage rate up to four months in advance, and the flexibility of switching to a better rate that might become available too.
“And, where rates are going down – customers in the final three months can choose to switch immediately without penalty.”
