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There are many reasons why to remortgage, however, it 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 continue to increase. So, here are five reasons why you should consider your options and find a new deal now:
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.
Mortgage rates increased at their fastest pace for a decade in the six months to May 2022 (BoE). The Bank of England base rate (1.25%) has increased five times since December 2021, and there are increased expectations of a
significant rise in the base rate in August. As the best deals are being pulled by lenders frequently, it will pay off to act fast and secure a fixed-rate deal now rather than delay.
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 offsetor interest-only option to free up capital. If you want increased flexibility you will need to switch to a mortgage deal that allows this.
The current outlook for the UK housing market is not particularly rosy and there is uncertainty whether house prices will fall over the next few years in some locations in the UK. 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.
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.