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Here, we explain how your mortgage may be affected by interest rates and how to reduce your monthly payments.
Even if interest rates change, your monthly payments won’t be affected if you have a fixed-rate mortgage – they’ll stay the same until the end of the fixed-rate period.
But you’ll want to think about what to do when this period ends. If you don’t arrange another deal, you may be moved onto a standard variable rate (SVR), which could see your monthly payments go up.
It’s important to understand what your current rate is, and when it’s due to end – so you can prepare to switch your rate or remortgage before the fixed-rate period finishes.
A tracker is a variable rate mortgage usually linked to the Bank of England base rate. This means your monthly payments can go up and down.
A change in the base rate will affect the amount of interest you pay, and your tracker mortgage payments. Use our Bank of England base rate calculator to see how your payments could change.
If you’re an HSBC customer and your mortgage is affected by a base rate change, we’ll write to you to confirm your new interest rate and monthly mortgage payments.
Changing to a new mortgage deal, such as a fixed-rate mortgage, could give you stability over a set period – where your payments will stay the same each month.
The SVR is the rate of interest that’s usually charged once a fixed rate or tracker period ends. The SVR is set by your mortgage lender – it’s not directly affected by any changes to the Bank of England base rate. However, the SVR is variable and can change, which means your monthly payments could go up or down.
If you’re on an SVR, you could be paying more than you need to, and it may not be the best option for you to stay on this for a long time. If you’d like to switch your rate, or you’re not sure what to do – we can help with your mortgage payments.
If you already pay more towards your mortgage, and you’re starting to feel the pinch – you may consider reducing or cancelling your regular overpayments for a while. You’ll still need to make your monthly payments on your mortgage, but it may help make it easier to manage your bills.
Alternatively, if you happen to have savings available, you could consider using some of these to make a lump sum overpayment and reduce your ongoing monthly mortgage payment.
Many people with a fixed-rate mortgage wait until their current deal comes to an end to switch. If you choose to switch before your current rate ends, you may want to find out what your early repayment charge (ERC) would be. This can help you decide if moving to a better deal early is worthwhile, and whether the money you might save outweighs any costs.
You could also remortgage to HSBC from a different lender to find a lower interest rate, which could reduce your monthly repayments. You can remortgage anytime but, to avoid potential ERCs, people tend to consider remortgaging towards the end of their existing mortgage rate.
There may also be costs involved when moving your mortgage to a new lender. To help you decide if it’s worthwhile, you can calculate your new mortgage repayments and see if the benefits of remortgaging outweigh any costs.
Explore: Should you remortgage?
If you need a little breathing space, you may be able to extend your mortgage term. This can reduce your monthly payments and make it easier for you to manage your outgoings. Depending on your needs, this could be agreed without an assessment of your circumstances.
Keep in mind – if you increase your mortgage term, it can take you longer to pay off the mortgage, and you’ll pay more interest overall.
As your circumstances improve, you may want to reduce your mortgage term, or make overpayments, to reduce the size of your mortgage and the amount of interest you pay.
If you have equity in your home, you may be able to borrow against it, in the form of a home loan to repay other lending. This might help you reduce and more comfortably manage your outgoings. You don’t need to wait for your current deal to end before you can apply for this, but borrowing more against your home, especially to repay other debts, needs careful thought.
With any form of borrowing, you need to be able to afford the repayments. You should consider how much you want to borrow, how long you need to pay it back and your current financial situation. The value of your property can also fall, which can leave you in negative equity, where you could owe more than your home is worth.
You could also change the date of your monthly mortgage payment to help you manage your money – as long as the correct payment is made in each calendar month.
For example, if you’ve changed employer and are now paid on a different date – you may want to adjust the Direct Debit, so your monthly mortgage payment leaves your account shortly after you’ve been paid.
If you have an HSBC mortgage, you can call us or use online Chat to request a change to your mortgage payment due date. We’ll need at least 7 working days’ notice before your payment is due, to update our records. Terms and conditions apply.
We understand the stress of rising costs and falling behind on payments. If you've missed a mortgage payment, or think you might, it's important you let us know as soon as possible.
You can call us on 0800 085 2482.
Lines are open Monday to Friday 08:00 to 18:00, Saturday 08:00 to 16:00.
Our trained members of staff are here to talk you through your options and can provide extra support tailored to your needs. Finding out what your options are won't affect your credit score.
Visit our mortgage payment support page for more information.
If you’re worried about energy, food and fuel prices going up, we also have guides to help you deal with the rising cost of living.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
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