Why now is a good time to remortgage

Thinking about remortgaging? You may be right!

In an attempt to help reduce the economic impact of Covid-19, the Bank of England cut mortgage rates to an all-time low of 0.10% in March last year. On 24 June 2021, the Bank of England voted to keep this rate. This decision will be reviewed in August 2021.

So, should I remortgage now?

Good question! With rates this low and a speculative predictability of rates going up, rather than further down, now is certainly the time to re-examine your mortgage deal.

Are fixed rate mortgages a good idea now?

The gamble is whether the rates will be lowered even further. In truth, no one knows. But seeing as mortgage rates are considered to be at an all-time low, it is unlikely they will be further substantially reduced. As the lending rates are so low, currently fixing your mortgage to this rate is seen as a good idea across the financial landscape. When looking at different mortgage options do check when the fixed rate deal ends, if there are early repayment charges or exit fees, in case your situation changes in the future.

What about tracker mortgages?

Tracker mortgages do as they say – they literally track the rise and fall of the Bank of England’s interest rate. If the base rate is low, that’s good, if it goes high – you’ll be paying back larger repayments. It comes down to whether you think the base rate will rise; if you think it will remain low for a while — which some speculators are suggesting — then a tracker mortgage could work for you. However, if you think rates are going to rise, a fixed rate mortgage at an all-time low interest rate could seem the safer option, especially if you have no exit fees or early repayment charges.

Let’s consider your mortgage in greater detail

Due to the current uncertain financial outlook as a result of the pandemic, fewer people are currently looking for mortgages – this means mortgage lenders are having to fight harder to get attention and are offering better incentives.

Good to consider:

Are you on your mortgage provider’s default tariff?

It’s worth a check! There are hundreds of homeowners who are currently on their mortgage lender’s highest default tariff, and whilst mortgage rates are really low, this is a great opportunity to swap lender and find a cheaper deal.

Don’t dawdle

History shows the moment the Bank of England hints at a rate rise, the best fixed-mortgage deals tend to disappear with lightening-like speed.

Are you on a fixed rate mortgage?

If you are, check your current rates, when your mortgage deal runs out and if there are early repayment charges or an exit fee which you will need to pay before swapping to a new lender.

Work out the costs of moving

Even if you don’t have exit fees or early repayment charges, there will still be costs involved with moving to a new lender. For example the arrangement fee, valuation fee and solicitor cost to manage your transfer.

Use a mortgage calculator

Our fantastic tool will help you understand the difference in monthly repayments should you move your mortgage to a new provider. Once you can work out your monthly repayment differences, you should be able to understand if the above costs, which can also be incurred, will be worth your switch.

Calculate your mortgage

The long and the short of it

If you are looking to switch from your currently expensive standard variable rate mortgage or coming to the end of a fixed-rate or tracker deal – now is definitely a good time to change to a fixed rate mortgage deal. With rates this low, you could easily save yourself a considerable sum of money.

However, it can be confusing to work out which mortgage deal is right for you. Assessing how much you will save, and potential payments you are unaware of, can also be difficult to evaluate. When it comes to borrowing money of such large amounts, it is worth using an independent mortgage adviser. They will find the best re-mortgaging deal to suit your needs or to reassure you that your current mortgage arrangement is still ideal. Mortgage advisers have in-depth knowledge of the market, can organise the right deal to suit individual needs and will instruct on how long to fix a mortgage.

To receive impartial specialist advice, please contact The Mortgage Experts today and start living your best life!



Leave a Reply

Your email address will not be published.