20 Aug 2014

Now May Be The Time To Consider Re-mortgaging

Now May Be The Time To Consider Re-mortgaging

Karen Anderson, Independent Mortgage Adviser, discusses how now may be the time to consider re-mortgaging and securing a rate and term that suits your requirements. 

Karen Anderson, Independent Mortgage Adviser, discusses how now may be the time to consider re-mortgaging and securing a rate and term that suits your requirements. 

Over the past few years many mortgage customers have benefited from lower monthly payments simply by staying with their current lender and paying the variable rate.

Although Bank of England Governor Mark Carney has said rate rises will be slow and steady, when they come, it would seem that they are inevitable. Many economists expect rates to rise to one per cent within a year and three per cent by 2018. 

Banks may attempt to absorb some rises before passing them on to borrowers but, if mortgages rose in line with the overall rate, a £150,000 mortgage would cost an extra £481 a year next year and an extra £2,545 annually in four years’ time.

Now may be the time to consider re-mortgaging and securing a rate and term that suits your requirements. Not only could re-mortgaging reduce your monthly outgoings, it could alternatively help you pay off your mortgage more quickly in one of two ways. You could either reduce your monthly payment by re-mortgaging to a lower rate, freeing up cash to make overpayments, or alternatively increase your monthly payment and take your mortgage over a shorter term.

Because your circumstances are unlikely to stay the same throughout the term of your mortgage, the mortgage you originally took out may no longer be the most suitable one for you. Re-mortgaging could bring your mortgage deal in line with your current needs and circumstances.

There are a number of ways your circumstances may have changed, including getting married, starting a family or starting a new job. If any of these apply, you should speak to someone about the potential rewards of re-mortgaging.

However, it isn’t only our circumstances that change; it is also the products available. If you re-mortgage, you may be able to take advantage of a deal that was not available when you originally purchased your property.

Because there are always new products available, regularly reviewing your mortgage deal could result in significant savings by re-mortgaging to a different lender.

You may have to pay an early repayment charge to your existing lender if you re-mortgage. However if you are concerned about whether or not you will have to pay an early repayment charge, speak to one of our mortgage advisers. In some cases savings are still possible where an early repayment charge applies.

Karen Anderson, Independent Mortgage Adviser

Your home may be repossessed if you do not keep up repayments on your mortgage.


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