If your mortgage deal is coming to an end in the next few months, you’re not alone. According to new data, £29 billion of mortgage deals are coming to an end this October – so now is the time to start considering your options.
Allowing your deal to expire without acting can cost you thousands of pounds a year in additional interest, so it can really pay to switch and save. And, with many lenders offering record low rates at present, now is the perfect time to speak to a broker and to explore your remortgage options.
£29 billion of deals coming to an end in October
According to data from market analyst CACI, reported in the Times, £29 billion of mortgage deals come to an end this October. That means there will be hundreds of thousands of existing borrowers looking for a competitive new deal later this autumn.
If you’re one of them, now is the time to act. If you do nothing, your mortgage will typically revert to your lender’s standard variable rate (SVR). These are normally much higher than other rates available in the marketplace, which means you’ll face a significant hike in your repayments.
If your deal is coming to an end in the next few months, speak to us to explore your options. Many lenders have deals available at record low rates, with several banks even offering sub-1% deals.
- TSB has a two-year fixed-rate remortgage deal at 0.94%. You need 40% equity in your home, and the bank charges a £995 fee.
- HSBC also have a 0.94% two-year deal. Again, you need 40% equity in your home, and this has a £999 lender fee.
If you have plenty of equity in your home, then switching to a new deal could generate substantial savings.
Using the HSBC example above, the bank’s current standard variable rate is 3.54%. On a £400,000 repayment mortgage with 20 years left to run, and adding the £999 fee to the loan, your monthly repayments would be:
- £1,833 on the HSBC deal at 0.94%
- £2,328 on HSBC’s standard variable rate.
Source: HSBC mortgage calculator
As you can see, doing nothing in this scenario could potentially see you pay nearly £500 more each month than you would if you switched to another deal.
Don’t just take the deal your existing lender offers
If you’re coming to the end of a deal with your current lender, they may contact you offering a range of “loyalty” products.
Many of these may be competitive, and even lower than the rate you are currently paying. However, before you simply take one of their deals, it can pay to speak to us.
We can access products from the entire market, and so it’s quite possible that there will be a more appropriate deal for you with another lender. Even a quick chat with us could help you to save a significant sum.
Now’s the time to begin the process
Even if your current mortgage deal is not set to expire until the autumn, now is the time to start the process for two main reasons.
Firstly, rates are extremely competitive at the moment. We can help you to find the right fixed-, tracker- or discounted variable-rate deal now, and then “reserve” the rate for you.
Lenders then typically give you between three and six months to complete on the transaction using the mortgage offer at the current rates.
With lenders offering many deals around 1%, it’s a great opportunity to take advantage of really low rates.
Secondly, acting now means that you give yourself plenty of time to complete the transaction. To avoid paying your lender’s higher standard variable rate, your aim should be to conclude the remortgage as soon after the expiry of your existing deal as possible.
So, if your current fixed rate ends on 30 September, it would be sensible for the new deal to start on 1 October. This avoids you having to pay more interest while the remortgage goes through.
All remortgages have some paperwork involved, from completing the application to the legal work involved in switching lender. It can take a few weeks for even the most straightforward transaction to complete, and so starting the process now ensures any delays aren’t costly.
Get in touch
We have wide experience in helping clients switch to a competitive mortgage product once their current deal ends. Considering the potential savings to be made – particularly on larger loans – we can cost a range of alternatives for you to find the most appropriate deal for your needs.
If your fixed or tracker rate is coming to an end and you’d like advice, please get in touch. Email [email protected] or call us on +44 (0) 20 3411 0079.
