At the end of the initial period on your mortgage, did you search the market for a better deal and remortgage your home loan? Or, like millions of other homeowners, did you let your mortgage switch over to the standard variable rate without a second thought? If your situation sounds more like the latter than the former, you could be losing thousands of pounds a year paying more than you need to.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Current Rates
Most standard rates are much higher than fixed rate deals currently on the market.
Recent deals include 2 year fixed rates for as low as 1.39% and 5 year fixed for 1.89%.
You can also still find 10 year fixed rate mortgages for 2.49% that offer long-term reassurance of low payments.
You can even find 2 year tracker rates, to take advantage of the low Bank of England base rate, for 1.19%.
Each option has their advantages, but they will all save you more money in repayments compared to a standard variable rate, which averages 4.23% as of March 2018.
Reasons people are staying with their lender
Many borrowers cited the difficult time they had when they took out their initial mortgage for not switching at the end of their term.
The complicated process, filled with confusing language and an overabundance of information was a key reason why they didn’t want to undergo the exercise again.
Others thought their lenders didn’t alert them to the end of their term with enough time to do anything productive.
Others still feel trapped in the relationship with their provider.
With new affordability tests lenders must pass and additional scrutiny they are subject to, many borrowers don’t think their financial situation will hold up to these new standards.
Reasons why you should consider changing
Borrowers shouldn’t let the fear of rejection prevent them from looking for a better deal since there are things they can do to become ‘remortgage ready’.
Firstly, they can talk with their current lender to check if there are any better rates they can switch to and avoid the new affordability tests in the process.
Even if they don’t think their circumstances are conducive to remortgaging – there’s always a chance they can luck out with a great deal.
Next, make sure your credit score is in great condition and that your finances are in order – that means paying off any debts you’re capable off and curbing your spending.
Whatever the reason you have for not remortgaging with a better rate, it’s never too late to do something about it.
If you’re not sure where to begin, our specialist mortgage advisers have the knowledge and experience to help you find the best mortgage deal for you based on your needs and circumstances.
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Dental & Medical Financial Services have been helping doctors and dentists with finding low-cost mortgages for your home and investment properties for over 25 years. Call Chris to discuss your options.
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