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Homeowners Have Opportunity Not to Be Missed in Remortgaging

Homeowners Have Opportunity Not to Be Missed in Remortgaging

Homeowner household budgets are being strained. Inflation, the higher cost of energy during winter, and higher interest rates are taking a toll. Over a million homeowners with fixed rate mortgages will come to the end of their deal this year and the change in their expenses could be shocking. They will no longer have their locked in interest rate, and for many that rate was obtained when the Bank of England’s standard base rate was near the all-time historic low. It remained at 0.1% through 2021, until the Monetary Policy Committee (MPC) voted in December 2021 to hike the rate to 0.25%. It remained at 0.25% until the February 2022 MPC meeting when the rate doubled to 0.50%.

Homeowners rushed to buy and remortgage as rates were set to rise throughout the year. If they obtained their loan in January 2022, their lender deal was much lower than would be found now. Even if they secured their deal anytime in 2022, they will have gotten a much better deal than available currently.

At the end of their fixed mortgage term, the homeowner will have the option of either remortgaging or allowing the lender to move them to their standard variable rate (SVR). Experts encourage homeowners to shop for a remortgage and avoid a SVR, for remortgage rates are likely much lower and with a remortgage another fixed rate deal could be chosen.

Unfortunately, many homeowners are unfamiliar with the benefits of remortgaging, such as obtaining a cheaper rate than found with a SVR, the ability to choose a fixed rate, and the option of cashing out built-up equity for needed expenses of the homeowner. Many will be unaware of the option to make a new deal, while others will believe they should stay loyal to their original lender. However, by pushing aside their loyalty the homeowner could find a better deal and save money, perhaps get offered a longer term, and they might save on fees associated with the new deal. 

Determining what offers are available is quick and easy due to the ability to shop for a remortgage online. It is a simple weekend project for any homeowner, and it could help them prepare a savings strategy and one that could offer peace of mind against the economic unknowns of the year ahead.

Experts encourage all homeowners to shop for a remortgage. Those that have come to the end of their mortgage term and are on a SVR could certainly benefit from the information gathered shopping for a new deal. Those nearing the end of their term this year could possibly choose a remortgage up to six months prior to the expiration of their current deal without any penalty fee for ending the deal early.

There are homeowners taking the current competitive lending market into consideration and expecting it to end soon as demand for lending grows. To take advantage of current deals they are remortgaging early for some deals are below the Bank’s standard base rate of 5.25%.

Simply visiting the website of a remortgage broker is a good starting point for finding the best remortgage deal. Because brokers work with many lenders for the benefit of the borrower, a homeowner could find an exclusive deal from a lender not offered directly from lender to homeowner. The ability to gather numerous quotes from a variety of lenders to review and compare makes shopping online with a remortgage broker a one-stop shopping experience that takes only minutes.

Homeowners could also go from website to website of lenders to gather quotes to compare.

The ability to shop around and find the best deal available is important, for those coming to the end of their term this year after having two years of their fixed rate deal from 2022 could be facing repayments that are hundreds of pounds more expensive. Any savings would be important in helping their household budget.

It has been noted that not since the postwar age have both inflation and higher taxes created such a financial burden on households. What is rarely included in the discussions is that inflation and more costly borrowing followed a global pandemic in which many people struggled financially. 

When any savings and financial security could make a difference, and certainly when it could be matter of affordability or not, a homeowner should consider taking the advice off experts and shop for a remortgage, review and compare the quotes, and if any opportunity is there to save, find financial security, and place a shield against uncertain economic times ahead, then take action to secure the new deal sooner rather than later.

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