Can you secure a competitive rate on your mortgage when your current deal comes to an end? There’s a good range of options out there, and you may not want to wait too long either… here’s our guide to remortgaging.
Remortgaging simply means moving your mortgage on your current property to a new deal with a more competitive interest rate. The main reason people remortgage is to save money, though some people do it to carry out home improvements as it can be a fairly cheap borrowing solution compared to other types of loans.
The end of 2021 saw ‘a flurry’ of borrowers remortgaging according to the website, This Is Money, despite the base rate increasing from 0.1 per cent to 0.25 per cent in December. Bank of England data showed that remortgage approvals rose to 44,500 in November 2021 – the highest number of mortgage approvals since February 2020, when 52,500 homeowners remortgaged.
However, these numbers only reflect customers who moved to a new lender – there will undoubtedly have been borrowers who switched to a new deal with their existing lender, so the numbers are likely to be even higher.
Low-interest fixed-rate deal
In essence, many borrowers are keen to secure a low-interest fixed-rate deal – and you could be one of them. While rates have increased slightly, it’s still cheap to borrow and with the threat of the Bank of England base rate rising this year, you may not want to put it off. Incidentally, the higher your deposit the more likely you are to get a competitive rate.
Several industry experts have predicted that low borrowing rates will continue this year. There are currently some competitive rates available. One industry spokesman said he expected 2022 to be a record year for remortgaging activity. However, you have to factor in the predicted base rate rises.
Our founder and Managing Director, Monica Bradley is passionate about ensuring that our clients are able to keep the interest they pay to a minimum. ‘I am determined that my clients pay the lowest amount of interest not just for the first two years of their fixed-rate deal but for the lifetime of their mortgage,’ she says.
If you’re currently on a fixed-rate mortgage deal that is due to end soon, your lender will put you on its standard variable rate when it ends which is likely to be higher than your existing rate. Remortgaging is a good option as you could get a new mortgage with a lower interest rate. However, you need to ensure that you plan ahead and start looking into it six months before your current deal runs out.
Look into your options
An experienced mortgage broker will be able to look into your options but it’s important to give them as much notice as possible so that they have time to find the best deal for you. At MB Associates, we let our clients know when their fixed-rate deal is coming to an end and speak to them in plenty of time about their options.
If you’re a new client coming to us for the first time, make sure you give us six months’ notice before your current deal ends and have your mortgage paperwork ready, along with proof of income and expenditure. You’ll need three months’ worth of payslips if you’re employed and suitable confirmation of income if you’re self-employed.
However, you may not want to wait until your current mortgage deal expires. You may be able to remortgage and save money, even if you have to pay an early repayment charge or exit fee. Depending on the mortgage deal you obtain, it could still be worth doing it.
Contact us for advice on remortgaging and whether it’s right for you.