I've locked into a 5.15% five-year mortgage rate: Was it a mistake? DAVID HOLLINGWORTH replies

Three weeks ago, I panicked and locked into a five-year fixed rate with my current bank at 5.15 per cent.

At the time that was the best rate available, and with my current mortgage deal ending in December and talk of interest rates rising, I thought it would be the sensible thing to do.

Since then, I've been worrying if I made a rather hasty decision and maybe should have seen if there are better options.

Five years fixed at 5.15 per cent is going to be brutal. There will be so much pressure to keep my job.

My mortgage is worth around £335,000 and my home is valued at £600,000.

Is there anything better your mortgage expert might consider or anything that I should be doing between now and mid-December when my current deal ends.

Mortgage help: Our column sees broker David Hollingworth answering your questions 

David Hollingworth replies: The amount of change in mortgage rates in recent weeks and months has been substantial. 

Although I feel like I've been talking about market volatility for the last few years, it's worth looking at the pace of change in fixed rates this year.

In the early months of this year there would have been a broad range of options below 4 per cent on the table. 

Fast forward to the beginning of this month and remortgage borrowers were faced with rates in excess of 5 per cent.

Sharp shift in mortgage rates

That shift of more than 1 percentage point has been brought about by the outbreak of the Iran war and the upward pressure it's put on inflation. 

Markets are therefore now expecting interest rates to climb. Fixed rates depend on what financial markets forecast will happen, and lenders have had to push up rates as sentiment has shifted to a more negative outlook.

Our analysis of the lowest remortgage rates available from the ten biggest lenders showed that the average two and five year fixed rates jumped by 0.4 percentage points or more in September alone. 

That's a significant move, so it's no wonder that you felt an urgent need to take action.

Applying for a new rate secures a deal and protects against any further increases. 

I would normally suggest that the best approach is to consider the rates across the wider market, rather than going straight for the deal on offer from your existing lender.

Having said that, looking at options at the end of September, the lowest rates would have been above 5 per cent and in some cases carrying a big fee. 

A rate of 5.15 per cent would therefore have not looked out of place.

It's not too late to review and act

Since then, market rates have stabilised a little and some lenders have been able to adjust their rates back down a little. 

One thing that borrowers may not realise is that although a new deal has been secured, it is often still possible to review that rate before completing.

Check whether your lender would allow you to change your product choice and without a charge. 

An adviser will be able to help assess whether you could switch to a better rate but also look across the market to see if a new lender would have a sharper deal. 

It may not yield a significant drop in rate but over the course of five years could still add up to around a thousand pounds.

Ask your mortgage question 

David Hollingworth is This is Money's mortgage expert and a broker at L&C Mortgages. 

He is ready to answer your questions, from buying your first home to remortgaging amid the rates chaos or trying to move home

Email: editor@thisismoney.co.uk with the subject line: Mortgage help

David will do his best to reply to your message in a forthcoming column, but he won't be able to answer everyone or correspond privately. 

Nothing in his replies constitutes regulated financial advice. Published questions may be edited for brevity or other reasons.

Should you choose a different product?

Your concern about locking in at a higher rate for five years raises the question of whether you may want to consider a different scheme altogether. 

Five year fixed rates give you more certainty over a longer timeframe and remove worry over where interest rates may head from here.

It's possible to fix for a shorter timeframe which may offer a slightly lower interest rate. It would also give another chance to review your deal in two or three years. 

If rates have come back down that would allow you to switch then but there's no guarantee that you won't be looking at similar or even higher interest rates.

More borrowers have been considering a tracker deal. They haven't increased yet, as base rate has so far held steady and current rates therefore look a lot lower than similar fixed deals. 

However, as base rate climbs so will the tracker rate, so you'd need to be prepared for an increase in your monthly payments.

If interest rates don't climb as quickly, or by as much as markets anticipate, a tracker could still end up looking cheaper overall. 

With two-year trackers as much as 1 per cent below fixed rate options, there would need to be four quarter point increases in base rate for the tracker to reach the same level. 

However, there's absolutely no guarantee that rates don't rise further or more quickly.

Trackers can be found more easily without any early repayment charge, so you aren't tied in. 

That allows you to switch to a fixed rate at a later date so could work as a holding position if interest rates ease back but if rates rise more rapidly than expected the fixed rate options will already have increased again. 

You'd also need to factor in the possibility of paying another arrangement fee.

The decision should come down to what you feel most comfortable with, initially lower payments but with a chance of increases, or the budgeting certainty of a fixed rate.

The fact that you are concerned about the undertaking that higher rates bring suggests that you may lean toward some certainty. 

You may therefore elect to stick with a fixed rate but keeping an eye on rate movement between now and completion could help a little.

How to find a new mortgage

Mortgage rates have jumped as conflict with Iran has driven up inflation expectations and dashed hopes of interest rate cuts.

If you need a mortgage because you are buying a home, or your current fixed rate deal is due to end, you should explore your options as soon as possible.  

This is Money has a long-standing partnership with fee-free broker L&C, to provide you with expert mortgage advice.

Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

Or use L&C’s online Mortgage Finder to search thousands of deals from more than 90 different lenders to discover the best deal for you.

Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage