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In the current economic climate, many homeowners may be unsure about when is the right time to look for a new mortgage. Is the time right now or should you remain with your current mortgage? It’s a very important decision that could impact your finances by thousands of pounds every year.
Remortgaging is the process of getting a new mortgage on your existing property, either with your current or a new lender. More often than not, the main reason to remortgage is to save yourself some money, but it’s not the only one.
But before you look at the ‘when’, you need first to consider the ‘why’. Is your current deal about to come to an end or has it already finished, and you’ve been moved to your lender’s costly standard variable rate (SVR)? Are you simply looking to save money, or do you want to release some of the equity in your home to make changes to it, such as renovations or adding an extension? Or, do you want to switch from an interest-only to a repayment mortgage?
Whatever your reason for wanting to remortgage, it’s important to obtain professional advice to see if remortgaging is the best option for you and to help you identify the best mortgage deal to meet your needs. There is no right answer for everyone, but we’ve provided five reasons why remortgaging now could save you money or make you money over the long term.
5 Reasons Why You Should Review Your Mortgage
1. YOU ARE NEARING THE END OF YOUR PROMOTIONAL PERIOD
You have a fixed or tracker mortgage and you’re coming close to the end of the initial promotional period (often two, three or five years). If you don’t find a new deal, you’ll automatically revert to your lender’s SVR when your promotional period ends.
This could be considerably higher than your current rate, and could cost you thousands of pounds in additional interest over the lifetime of the mortgage. Instead of remaining with your mortgage and accepting the higher SVR, now would be a good time to talk with us about a new mortgage deal.
2. TO TAKE ADVANTAGE OF HISTORICALLY LOW MORTGAGE RATES
The Bank of England base rate is currently unusually low, due to the financial conditions surrounding the coronavirus (COVID-19) pandemic. That means borrowing money now enables you to take advantage of lower-than- normal mortgage rates.
Even if you will pay a fee to exit your current deal early, for some people it could be worth doing so, to secure a rate at a lower level.
3. TO REMORTGAGE WHILE PROPERTY PRICES ARE RISING
Property prices have been rising in recent months in spite of the COVID-19 pandemic, and that can mean it’s a good time to remortgage.
Why? Because your loan-to-value ratio will be lower. In other words, the amount you need to borrow will be a smaller percentage of the market value of your home. If prices fall again, your loan-to-value ratio becomes higher and you may not have access to the best mortgage deals.
4. YOUR FINANCIAL SITUATION HAS CHANGED
If your financial situation has changed significantly since you chose your current mortgage, you might want to explore other options. Perhaps you have more cash available now, and you’d like a mortgage that allows you to make overpayments as and when you want to. Or perhaps you need to improve your cash flow and need a mortgage with flexible repayments.
5. TO RAISE CAPITAL
In some situations, you might want to borrow more against your home. For example, you might want to build an extension or carry out home improvements that will increase the value of your home. Or you might want to buy a second property as a buy-to-let. Remortgaging could help you to raise the capital to do this.
If you would like to find out more about remortgaging or would like a review on your current mortgage deal, then get in contact with us at My Mortgage & Protection Experts – Call me back
My Mortgage Experts & Protection Experts Ltd (FCA 937076), is an Appointed Representative of King Mortgages Ltd.
King Mortgages is authorised & regulated by the Financial Conduct Authority (FCA). King Mortgages Ltd is entered on the financial services register http://register.fca.org.uk/ under reference number 803561.
The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
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Changes in property value, coupled with a potential reduction in your loan amount (with a repayment mortgage), mean a change in the equity available in your property (Loan to Value); hence there could be improved opportunities for a better mortgage for you.
Sussed will track when your mortgage is due to expire (usually when your mortgage payments rise substantially as you will automatically transfer to your lender’s standard rate).
The app will alert you when it’s the right time to discuss your options with your mortgage broker.
Sussed can help you plan.
This feature is ideal for today’s economy and increasing prices. Sussed will continually scan the market, looking for the best-fixed rates available, especially when interest rates are rising.
Using a series of algorithms, our clever technology can identify longer-term fixed rates available today that could save money against predicted rates at the end of your current product term (including the cost of transfer) – sussed is doing all the hard work.
With automatic property value updates and your Mortgage information loaded, this feature calculates the amount of equity and the maximum potential loan that may be available within a landlord’s portfolio. This will assist with seeing if there is the opportunity for to perhaps buy another property from leveraging your portfolio.
Within sussed, you will also be able to see each of your properties with a roadside picture, a confirmed property value, monthly rental, current mortgage balance, payments, interest rate and the Loan to value/Gross rental yield.
Sussed can help you manage your portfolio.
This feature is there waiting for interest rates when they reduce. Using the same technology as Rate Riser, sussed will identify if your current deal is now able to be improved.
Should the interest rates decrease, sussed will compare deals available on the day with your existing deal and flag if there is an opportunity for you to save money by switching.
There are price limits on homes you can buy with an equity loan. The limit is different for each region in England.