Is It The Time To Remortgage, Or Might You Put Off?

Is now the correct time to be thinking of remortgaging? If you have previously been on a bank’s mortgage deal that is now reaching or has reached the end of the supply period, then you should be thinking that it is high time to peek around the promote to se what other mortgage deals are offered to you. But is it the right thing to be doing, or should you simply sit there and follow your bank’s variable rate mortgage?

Well, there’s no one solution for everyone in every situation. In truth, every person wishes to look at their exact circumstances, se what is on bestow and decide what is best for them. But there are a handful of things to be on the watch for.

I was a short time ago standing in the queue in the bank waiting to pay in a cheque into my account. The assistant was helping the client in front of me. When the matter was done, the bank assistant asked the customer if they had anything else that they wanted. The customer answered that his mortgage was ready to come to an end and what did he need to do to move to a new fixed rate mortgage.

Well, the assistant’s answer amazed me. She told him that at that moment, the bank’s variable rate was lower than the fixed rate. For that reason, in the short term, it would be cheaper to take the variable rate and then transfer to the fixed rate when it looks like the interest rates might be going up.

The maths behind this is quite straightforward and what might drive your own decision. By staying with the offer that is at hand and not moving, what will the monthly repayments be? Contrast that to if you do move to another mortgage or even a different bank, what would your monthly outgoings be then?

Be exceptionally careful when doing this calculation to make sure that you do evaluate like for like. Compare mortgage rates for mortgages that are alike. Don’t fall into the trap that various lenders should set of constructing a mortgage peek cheaper as they are extending the repayment period by 5 or more years. Whilst over the repayment period of the current mortgage this should work out significantly cheaper, over the long term it may perhaps end up costing you thousands more.

If the short term fall of monthly payments appeals, then ask your current lender what they have on grant with regards extending the repayment period. And then compare all remortgage rates for the current mortgage against your wished-for mortgages. You possibly will then see which, over the long term, will cost you the least.

The other hurdle is the charges incurred to change mortgages. Don’t forget to include them into your calculation. If all of this sounds too difficult – speak to an independent mortgage advisor.