One of the consequences of rising inflation and the chancellor’s “mini-Budget” is that interest rates in the UK are likely to rise further over the next few months.
With the Bank of England having already increased rates seven times since December 2021, and the cost of long-term borrowing rising sharply after the recent “mini-Budget”, you’ll likely pay more for a new mortgage.
So, to help you keep costs down, here are three tips that will help you if you plan to switch your mortgage.
1. Plan well in advance
If your mortgage deal is coming to an end, it’s important to start planning early. Don’t wait until your deal has expired before shopping around, as otherwise it’s likely you’ll spend a few months languishing on your lender’s standard variable rate (SVR), potentially paying much more than you need.
Many mortgage lenders will produce offers that are valid for three or even six months, meaning you can line up your new deal well in advance, with the aim of completing the switch immediately after your existing deal ends – sometimes on the following day.
An additional benefit of this is that you may be able to secure a great rate now before they rise in the future.
You could secure your borrowing on a rate now, complete in a couple of months’ time, and potentially benefit from a lower rate than if you had waited. This is especially true in an environment where interest rates are rising.
2. Move quickly
You have previously read about how the current “shelf life” of a mortgage deal is at a record low. Lenders are withdrawing and repricing deals quicker than ever, with some great low-cost deals only on the market for a matter of days.
So, it’s important to move quickly to secure the product you want.
This has been magnified by recent volatility in the borrowing markets following the mini-Budget. Indeed, Moneyfacts reported that almost 1,000 mortgage deals were withdrawn from the market in just a few days at the end of September.
Rachel Springall from the financial analysts has advised borrowers to seek independent advice to assess their best option. “The upheaval in the mortgage market may cause frustration among both borrowers and brokers as they see deals disappear overnight,” she said.
We can add real value in an environment where lenders are rapidly withdrawing the best deals by “reserving” deals on your behalf.
We often work late into the evening to submit applications to lenders ahead of midnight deadlines, ensuring our clients can take advantage of competitive deals before they are withdrawn.
With many lenders repricing deals upwards, get in touch with us to find out how we can help you to secure the deal you want before it is suddenly withdrawn with little notice.
3. Work with an expert
When your current deal is ending, it can be tempting to simply contact your existing lender and switch your deal onto one of their products.
However, there are several reasons you should think twice before doing this:
- It’s unlikely that the deals your lender is offering you are the best in the market
- There may well be significantly better deals available elsewhere that can save you a substantial sum
- Your lender may not have the type of product you want – for example, they may not have a fixed rate over the time period you are looking for, meaning you end up taking a deal that’s not necessarily the right one for you.
We have access to thousands of deals from across the market – including many not available directly to borrowers. Many of these offer remortgage incentives such as free valuations and legal work to mitigate the costs of switching.
And, with the excellent relationships we have with these banks and building societies, we can work closely with them to secure you the best remortgage package available, potentially saving you thousands of pounds.
Get in touch
If your mortgage deal is ending in the next few months, get in touch with us to find out how we can help.
In a volatile market we can work with you to secure the most appropriate deal for your needs, and save you money and hassle.
Email [email protected] or call us on +44 (0) 20 3411 0079.
Please note
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
