Is the New Year the right time to be thinking about a new mortgage deal?

With the end of the stamp duty holiday fast approaching the mortgage market is looking a lot more competitive.

Many lenders are cutting rates on 75, 80 and 85% loan to value mortgages leading to a mortgage price war as they compete for business in a slowing property market.

And rates on 90% mortgages are expected to follow.

So should you be thinking about remortgaging?

Avoid the SVR

If your deal is coming to an end, it could be a great time to get a great new rate on your remaining mortgage.

Many people fall into the trap of staying on their lender’s standard variable rate (SVR) after their initial fixed interest rate comes to an end, as they think it might be too complicated to remortgage.

An SVR is a mortgage interest rate that usually kicks in when you’ve finished your fixed or tracker deal and is usually higher leading to a considerable rise to your monthly payments.

So, once you finish the initial period of your mortgage deal it’s definitely worth shopping around for a new deal.

Get a better rate

Even if your deal is not quite due to end, it could still be worth you re-mortgaging if you are on a higher interest rate.

You may have an early repayment charge, which could be as much as 2-5% of your outstanding loan, and you may have to pay an exit fee (sometimes called an admin fee or a deed release fee).

But this doesn’t mean you shouldn’t think about it, as the savings could be bigger than the costs, particularly if you have a lot left to pay on your mortgage.

An independent financial adviser could help you work out if re-mortgaging could save you money.

Cash in on value rise

Thanks to the stamp duty holiday house prices in many parts of the UK have seen big rises.

If the value of your property has risen since you took out your mortgage, you may have crossed into another loan-to-value category and may therefore be able to access better rates than the one you are on.

Again,  any saving would have to be offset against the cost of exiting your current mortgage deal, but it’s worth doing the maths to see if a new deal would be financially beneficial.

Get professional advice

Whatever your circumstances it’s always worth getting mortgage advice from a professional.

An independent financial adviser can help you assess your circumstances but can also help make sure you get approved for a new mortgage deal.

We source mortgages from the whole of the market and manage the process right through from application until completion.

Get in touch today to find out how we could help you.

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