5 reasons to remortgage now
Not sure as to whether you should remortgage now or hold off?
Thinking about whether to remortgage can be a complex decision at the best of times, let alone with the current uncertainty affecting the market and us all.
Ultimately, it could save you a great deal of money, especially as rates remain at historic lows. Banks, unlike during the last financial crisis, are also liquid and looking to lend, having adapted their internal processes to work with the current restrictions in place.
So, here are five reasons why you should consider your options and find a new deal why now is potentially an excellent time:
1. Your current mortgage deal is about to end or has already ended
This means you could end up on or are on your lender’s Standard Variable Rate – often more than double your fixed or initial rate. According to data from Experian, over 4 million borrowers will be on their lender’s SVR and, depending on the size of your mortgage this could end up costing you thousands, if not tens of thousands of pounds, in extra interest
2. Mortgage rates are at historic lows and not likely to drop further
Mortgage rates and the Bank of England base rate (0.1%) are at historic lows. While swap rates are in decline, lenders are unlikely to pass on these reductions to consumers on account of the riskier lending environment. It therefore makes sense to take advantage of these low rates and save. You may even want to consider if it is worth leaving your existing deal early and paying the early repayment charge as rates are so low this could be the cheaper option in the long run.
3. Increased flexibility and exploring your options
Your financial situation may have changed since taking your initial mortgage deal and you may want to make over-payments on your mortgage or indeed switch to an offset or interest-only option to free up capital. If you want increased flexibility you will need to switch to a mortgage deal that allows this.
4. Uncertainty in the market and potentially falling house prices
The current outlook for the UK housing market is not particularly rosy and house prices are expected to fall in the short and medium term. You may be thinking, well I am not going to move so this does not affect me… However, if you need to remortgage soon and house prices fall in the future it could lead to you having a higher loan-to-value ratio and thus your mortgage could become more expensive.
5. Capital raising on your property
Your mortgage can be really useful as a financial planning tool and remortgaging may enable you to raise capital on your existing property and either finance home improvements which could add value to your home or finance the purchase of a second property or buy-to-let.
What works for you?
It is always best to get independent expert advice when making major financial decisions such as a remortgage. We can help – assessing your circumstances and your requirements and finding you the best solution. Get in touch and talk about a better mortgage today. Please remember that your home could be repossessed if you do not keep up with repayments on your mortgage.