Ensuring you’re on the most advantageous deal and interest rate is always a wise move
IN THE CURRENT economic landscape, many homeowners may be asking the question: When is the best time to search for a new mortgage? Should they act now or hold onto their existing mortgage? This decision, far from being inconsequential, could significantly impact their yearly finances by thousands of pounds. Your mortgage deal appeared quite competitive in its early days. However, it’s crucial to reassess your mortgage. Ensuring you’re on the most advantageous deal and interest rate is always a wise move. It’s advisable to periodically review your mortgage, perhaps annually or every couple of years. This guarantees that you’re still reaping the benefits of the best possible deal and that your mortgage remains aligned with your financial objectives and circumstances.
DECODING THE MOTIVATIONS BEHIND REMORTGAGING There are several reasons why you may need to reassess your mortgage. These can range from changes in interest rates, alterations to your financial situation, fluctuations in the housing market, or revisions to your personal goals. It’s a significant decision that can shape your financial future, so understanding these motivations is crucial.
Here are instances to consider reviewing your mortgage:
SEEKING MORE COMPETITIVE RATES One primary reason homeowners consider remortgaging is to secure a more competitive rate. However, breaking your initial agreement could result in an early repayment charge. That said, the savings rom a new rate could offset this cost, making remortgaging a viable option.
SAFEGUARDING AGAINST RISING INTEREST RATES As we have seen over the past year and a half, the overall cost of variable rate mortgages has increased, and other promotional rate deals have also risen. Securing a lower fixed rate mortgage through remortgaging could prove beneficial, especially if you anticipate an increase in the Bank of England rates.
CAPITALISING ON INCREASED HOME VALUE With property prices often in flux, your home may fall into a lower loan-to-value (LTV) band than when you first secured your mortgage. In such cases, remortgaging could be advantageous.
REDUCING MONTHLY BILLS THROUGH REMORTGAGING Mortgages often constitute our most significant expenditure, so reducing them can lead to substantial savings. Many of us may stay with our current lender to avoid stress. However, skilled negotiation and remortgaging could leave us better off financially.
NECESSITY OF REMORTGAGE AS CURRENT MORTGAGE ENDS You’ll need to find another mortgage when your current one expires. Typically, mortgage deals last between two and five years and offer incentives like fixed rates, tracker or discount mortgages. However, due to market fluctuations, your lender will automatically switch you to its Standard Variable Rate (SVR) once your deal ends. This rate is often higher and pricier than other options, making remortgaging to a cheaper rate an appealing choice.
SEEKING INCREASED FLEXIBILITY If you’re dissatisfied with the conditions of your current mortgage deal, you may want to consider a change. This could stem from factors like a new job, a career break necessitating ‘payment holidays’ or the wish to make larger payments due to increased income. If this resonates, an alternative mortgage may accommodate these needs or offer packages more suitable than your current lender’s.
THE DESIRE TO BORROW MORE Life occasionally necessitates an extra cash injection. If your lender isn’t receptive to lending you additional funds, remortgaging with a different provider might allow you to raise the necessary capital or secure newer, more competitive rates. Your prospective lender will enquire about your intended use of the funds.
>> READY TO TAKE THE NEXT STEP ON YOUR MORTGAGE JOURNEY? << Failing to review your mortgage when interest rates alter or your mortgage deal concludes could mean missing out on alternative deals available in the market. This oversight could ultimately cost you more. Our team is ready to guide you through every step of your mortgage journey. Please contact Omni Finance – telephone 01424 236903 – email simon.hickman@omnifinance.co.uk
The Mortgage & Property Magazine is published quarterly for Omni Finance by Goldmine Media Limited. All enquiries should be addressed to The Editor, The Mortgage & Property Magazine, c/o Goldmine Media Limited, 124 City Road, London EC1V 2NX. Please note that The Mortgage & Property Magazine does not accept unsolicited contributions. Editorial opinions expressed in this magazine are not necessarily those of Goldmine Media Limited and Omni Finance does not accept responsibility for the advertising content. Offers and promotions may have limited availability. To discover more, visit the Omni Finance website: www.omni-finance.co.uk. All Rights Reserved 2024. The content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements. Due to the devolved administrations of the United Kingdom, the information relates to England only except where explicitly referred to otherwise. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. AS WITH ALL INSURANCE POLICIES, CONDITIONS AND EXCLUSIONS MAY APPLY. YOUR BUY-TO-LET PROPERTY MAY BE REPOSSESSED OR A RECEIVER OF RENT APPOINTED IF YOU DO NOT KEEP UP PAYMENTS ON YOUR MORTGAGE. MOST BUY-TO-LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FCA). EQUITY RELEASE MAY INVOLVE A HOME REVERSION PLAN OR LIFETIME MORTGAGE WHICH IS SECURED AGAINST YOUR PROPERTY. TO UNDERSTAND THE FEATURES AND RISKS ASK FOR A PERSONALISED ILLUSTRATION. EQUITY RELEASE REQUIRES PAYING OFF ANY EXISTING MORTGAGE. ANY MONEY RELEASED, PLUS ACCRUED INTEREST, TO BE REPAID UPON DEATH OR MOVING INTO LONG-TERM CARE. EQUITY RELEASE WILL AFFECT POTENTIAL INHERITANCE AND YOUR ENTITLEMENT TO MEANS-TESTED BENEFITS BOTH NOW AND IN THE FUTURE.
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