If you are happy with your current mortgage, that’s great but how far away are you from remortgaging?With two and five year fixed rates, homeowners are needing to look into this sooner than they sometimes expect.
It might not easy to go back to looking at mortgages, given the interest rates are much higher than they have been for years.
According to Moneyfacts at 10th July this year, five year deals were at an average of 6.13% and two year fixed was 6.63%.
As with taking the time to look into your utility bills, it is worth shopping around to see if you can find a cheaper interest rate when remortgaging.
If your fixed rate deal it is coming to an end, you could end up on your lender’s standard variable rate (SVR) once the fixed period has ended. However an advantage of an SVR is there are usually less penalties if you want to pay off your mortgage earlier than planned.
With your variable rate deal* you may be concerned about rising monthly costs. If you are worried, you may find a fixed rate deal will give you peace of mind with fixed monthly costs. However, it might be worth weighing up the pros and cons of costs of remortgaging and note that fixing into a rate means you may not be able to benefit in reductions in the future.
What about if the property’s value has grown* because the price of your property has gone up, lenders may be able to offer you better terms. A lower loan-to-value (LTV) could help you to access a lower rate by remortgaging but consider all your options as a whole.
Home improvements with equity release money*, remortgaging by using the equity in your property can sometimes be a popular way to raise finances, but there may be cheaper ways to borrow so it’s worth investigating.
Looking for flexibility* – Your existing deal might have harsh terms for overpaying and will stop you from paying more than the agreed monthly amount. If you’d like to clear down your mortgage more quickly, a remortgage could allow you to change to a deal that allows a certain amount that you can overpay without being charged extra fees.
*Please note – If you are currently in a deal that is not due to end and decide you wish to remortgage to another lender, there may be high early repayment charges to leave.
Read the further news here and here.