Should I remortgage?

New customers aren’t the only ones who stand to benefit from cheaper mortgages.

Mortgages are long-term commitments but you do not have to stick with the same product for the whole term of the loan. A remortgage is where you take out a new mortgage on a property you already own – either to replace your existing mortgage, or to borrow money against your property.

With mortgage borrowing rates currently at a near all-time low, homeowners are able to borrow more cheaply, which largely explains why the number of people remortgaging hit a seven-year high in August 2017, according to the Council of Mortgage Lenders.

With so many variables to guess at, it’s not surprising it is confusing wether you should remortgage or not. Most people remortgage at the end of a fixed or tied in period (typically 2-5 years)

The simplest approach would be to compare the present rate being paid with a new remortgage rate. However, the following costs should also be taken into account, arrangement fees, broker fees, early redemption penalties where applicable. So if your savings will exceed the costs it makes sense to switch, but if you would be out of pocket you should stick with your current deal.

So do the sums add up in your case? A genuine example of a recent case proved beneficial for one of our clients who came off a 2 year fixed rate of 2.39% onto a new 2 year fixed rate of 1.69%. Even after fees etc, the client was £56p/m better off. It should also be noted that had the client chosen the 5 year fixed mortgage rate he would have been £5p/m worse off after fees and costs have been taken into account.

According to the Bank of England, mortgages are cheaper than ever before, with the average rate on a new loan falling to just 1.95%, which is the lowest level on record at the Bank of England.

Check if you could save money

1. Find out how much your property is worth
2. Find out how much you still owe on your mortgage
3. Consider other fees

Inflation is rising faster than wages and many households are feeling the pressure on household finances with less disposable income. You need to know that what comes out of your account each month is affordable. You need a mortgage you can live with.

Great benefits of an independent mortgage adviser

  • Search the whole of the market to find the most suitable product for you
  • Exclusive deals which are often not available on the high street
  • Always take into account your circumstances to find the product you will be most comfortable with
  • Use latest technology to find the most competitive interest rates, helping save you time and money
  • Flexible appointments to suit you eg evenings and weekends if required
  • Offer a fast and quick service without you leaving the comfort of your own home
  • Peace of mind knowing that mortgage advisers are independent, have to pass exams and be authorised by the FCA before being allowed to give advice to the public

A mortgage adviser can also help you if:

  • You have been turned down in the past by your bank
  • Are self-employed
  • You have had credit problems in the pastEach individuals circumstances are different what suits one person will be different for the next. Our expert independent mortgage advisers are full experienced and are always happy to talk. Fact: Mortgage lending has hit its highest level since 2008

Find out how much you can save by lowering your monthly mortgage payments call 1st Financial Foundations on 01908 523 420 / 020 3897 8100 or email us with your enquiry click here.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Source: Bank of England, Property Price Advice