Remortgage in line with the base rate

As doubt over the future of interest rates increases many homeowners have been left with a feeling of insecurity over the direction that the housing market is heading. Borrowers looking into the possibility of a remortgage deal may feel confused, with some left wondering if a remortgage deal is still worthwhile.  

As a mortgage is usually the largest expenditure in a household it is important to keep it under review regardless of where interest rates are. Particularly if a discounted or fixed rate has come to an end and the new rate of interest is the lender’s standard variable rate, there will undoubtedly be a remortgage deal available to suit a borrower’s individual requirements and save them money.   

Remortgage considerations

Borrowers weighing up their remortgage options need to think about their individual circumstances. Although there are lots of eye catching rates available, it would be inadvisable for example, if someone struggling with their mortgage payments decided to remortgage to a tracker deal, as another interest rate rise could make repayments too expensive. An option for someone struggling with mortgage payments could be to remortgage to a fixed rate deal making monthly payments predictable.

Borrowers also need to ask themselves what are they looking for from a remortgage deal. If the answer is to consolidate debt, borrowers should make themselves aware of the remortgage options available. For example, often when remortgaging for debt consolidation a flexible remortgage deal could be a good option as it will allow overpayments each month. However, many standard deals also a degree of monthly overpayment- typically 10% - which may be sufficient to facilitate repayment of the additional debt. Many of these deals offer free incentives, such as legal work and valuations for remortgaging which can save on the cost of switching. 

Borrowers considering a remortgage deal need to do their sums. Often when homeowners remortgage from their existing lender an early repayment fee will be issued, charging borrowers for leaving their current mortgage deal. However, even if an early repayment charge is not incurred, it is important to make sure that a remortgage deal will save money in the long run. A mortgage broker can help with this by issuing expert advice and finding the most suitable remortgage deal to suit individual needs, saving valuable time and money.  

Finally, borrowers currently on their lender’s Standard Variable Rate (SVR) could make the biggest savings through a remortgage deal. As they will undoubtedly be paying more than they need to. Monthly payments can be dramatically reduced if borrowers remortgage away from their existing lender’s SVR to a lower interest rate. Anyone in this situation should consider possible remortgage options immediately.             

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