Wondering whether to remortgage or not?
If this question has been living rent free in your head, we have the short answer to your query.
Yes – now could be the best time to remortgage. Especially if you’re on a standard variable rate, coming to the end of your long-term fix or are on a high-interest rate.
Why? Well, according to consumer champion brand Which?, and consumer expert Martin Lewis, a number of mortgage rates are at a ‘record low’ with many lenders offering interest rates below 1% for the first time in almost four years.
However as with any great deal, some T&Cs apply.
Jo continues: “To access these super low rates, you must meet each lender’s set of criteria. This differs depending on the organisation.
“Some lenders are offering their lowest rates for five-year fixes while other deals come with fees. Which is why it’s best to speak to a mortgage adviser to find the best deal for you and your unique set of circumstances.”
So, who can remortgage to make the most of this deal?
Remortgaging is nothing new. But in essence, the term relates directly to homeowners who have a mortgage on a property and swap to another mortgage deal with a different lender.
Which is why, remortgaging right now could suit:
- Those on their lender’s standard variable rate (SVR) – SVRs are often the default rate your lender puts you on once your fixed-interest rate mortgage has come to an end. They are often higher than a fixed-interest rate mortgage.
- Those who are coming to the end of their long-term fix – make sure you don’t get caught off guard and be landed with your lender’s SVR. Make sure you look into new deals at least four to six months before you come to the end of your mortgage deal.
- Those who remortgaged years ago on a high-interest rate – times have changed, and interest rates have changed too. With many being at an all-time low, who knows how long this drop in rates will stick around for?
- Those wanting to reduce their overall mortgage length Jo has recently remortgaged clients who have reduced their interest rate by more than 1%. But instead of reducing their monthly payment, they have chosen to reduce the term of their mortgage from 28 years to 14 years. Therefore, they will pay their mortgage off in half the time saving them many thousands of pounds in interest.
Ready to remortgage?
Jo says: “Whether you’re looking to do a five- or two-year fix, there a range of remortgaging options out there. However, if there’s one piece of advice I could give to homeowners, I would tell them not to leave remortgaging until the last minute.
“I usually get in contact with my clients around six months before their mortgage terms comes to an end. But around four months is the sweet spot. This allows for enough time on all sides to secure the best deal and get it across the finish line.”
If you’re thinking of remortgaging, why not get in touch with Mortgage Confidence? Our mortgage adviser Jo Jingree has more than 20 years’ experience in the sector and has helped a number of people remortgage including those that are credit impaired.