Despite recent market uncertainty, the current outlook for those needing a mortgage or remortgage is more positive than it may seem. Remortgaging may not be at the top of your agenda, but it could be highly beneficial for you and could reduce your monthly mortgage expenditure considerably<1[, depending on your circumstances. Here, we outline a few reasons why considering your mortgage requirements now could be a good idea.
Record low rates
Since last year’s cut to the Bank of England Base Rate, mortgage interest rates have fallen dramatically. Borrowing over a million pounds is now cheaper than it has been in a long time. In particular, we have seen a trend of stronger competition among lenders on 5 year fixed rates in both buy to let and residential mortgages, on rates and fees.
Not only are the rates lower, but they protect borrowers from short-term rate fluctuations, and give property owners the financial security of a low rate for a number of years. They can also allow landlords to borrow more as a result more flexible lending criteria.
Increased flexibility in lender criteria is making now a good time to remortgage2. Whether you are an older borrower or have a complex income structure, there may be more options available to you than you realise. Lenders have opened up their affordability criteria to accommodate a wider range of borrowers.
Your current mortgage rate
Is your current mortgage on the lender’s Standard Variable Rate (SVR)? If the incentive period of your mortgage has ended, the mortgage will transfer onto the lender’s SVR. It is most likely to be much higher than the initial mortgage rate, although it can also be lower.3 You may be paying far higher monthly mortgage repayments than you have to.
Even if your mortgage has not reverted to the lender’s SVR, you may still be paying more than you should be. You may be on a fixed rate mortgage at a much higher rate than mortgages currently available. Accepting any early repayment charge that applies and moving over to a deal at a more favourable rate early could still potentially save you money in the long term.
There are a number of other reasons for choosing to remortgage, click here to read more on this topic.
The next step
If you want to know if remortgaging could benefit you, seeking professional advice now is a good idea. It may help you find the best available mortgage deal with terms that suit your circumstances best, and give you some additional financial security.
Read here how we secured a bespoke £7.32 million Buy to Let Portfolio remortgage.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you re-mortgage.