Tackling cost of living

Mar 25, 2022

This week it was reported in the press that the cost living rate of increase is currently at a 40 year high. We’re all feeling the pinch!

There are a few things you can do to keep those monthly outgoings at bay. In today’s article, we wanted to share a few ideas the AFS team had that you might want to consider when it comes to your mortgage.

At the time of writing this article, we have seen many large banks review their rates many times in the last few weeks alone. We’ve never known anything quite like it! Whilst rates are going up, certain types of products are impacted more than others.

2-year fixed rates have seen some of the largest increases over the last month. Traditionally, a two-year fixed rate should be a reasonable amount cheaper than its longer-term stablemates.  However, right now they are more or less the same rate, in some cases, identical. This makes the longer-term fixed rates more attractive as a simple side-by-side comparison. We have noticed a big uptake in five-year fixed rates because of this.

Switch your rate early?

A few lenders will allow you to switch your mortgage a few months before the end of your beneficiary period. This means if your current lender is offering a ‘rate-switch’ deal that is cheaper than your current rate. you may be able to switch and start saving right away! Not all lenders do this so you’re best off giving us a call to find out more.

How about a Variable rate mortgage?

There are two main types of variable rate mortgage. Trackers and Discounted rate mortgages. Trackers are traditionally offered by banks, these rates move in line with an external index such as the Bank of England base rate. Trackers are inherently more risky than fixed rates because they can go up and down outside of your control. Recently the rate has increased from 0.1% to 0.75% in a short window. Those on tracker mortgages would have seen their mortgage payment increase as a result. That’s not to say it’s a bad thing as these rates may be cheap to begin with. Over the last ten years, trackers would have almost always saved money over a fixed rate.

Discounted rates are traditionally offered by building societies. These rates offer an initial discount for a fixed period. The discount is off the society’s own standard variable rate.  As building societies lend their members money, they tend to be less impacted by global markets. We are seeing this now as discounted variable rates are particularly cheap at the moment. Again, not without its risks but right now, out of the gates, it’s going to be the cheapest mortgage.

Steven Morris – Advising Director



Steve loves a complex mortgage. Most recently he has used his technical geekery to work his way up through Which? Mortgage Advisers, progressing to Senior Adviser and then Onboarding Manager. There, he was responsible for hiring, training and managing new advisers.

He also ran the monthly new starter inductions and wrote and maintained the telephony advice standards of the company. Outside of work Steve can be found coaching and being run ragged by his local under 10’s rugby team, Bristol Harlequins RFC.

Meet the rest of the Advantage Team

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