For the past couple of years, mortgage rates have been at an all-time low. However that may be about to end with experts predicting an interest rate rise early in 2022.
Now could be the best time to check out current remortgage rates and lock into a cheap deal.
Here are some tips to consider:
Review your current mortgage
Gathering relevant facts on your current mortgage will help you get organised. Use the information to work out if switching to a new deal is worth it:
What’s your current rate and monthly payment?
What type of mortgage is it? Fixed or variable?
When does your deal end?
Will you be charged if you switch deals ie an early redemption charge for leaving the deal early?
Compare remortgage deals online
Use a mortgage comparison tool to see if you’re likely to save by switching to a different lender. Don’t forget to take all the factors into consideration, including any fees. It can be all too easy to be swayed by the lowest interest rate available, but higher fees can have an impact on the total cost. Calculating the costs, including fees, over the term of the mortgage will give you a good idea of how much you’re likely to save
It’s not about finding the best mortgage, it’s about finding the best mortgage for you
You’ll always see lenders promoting their “best ever rates” but sadly not everyone will qualify. When you remortgage, your lender will undertake some financial checks to ensure you are a reliable and trustworthy borrower. They’ll want evidence of your income and outgoings to ensure affordability. And if you’ve had any credit problems in the past, this may affect your chances of getting your desired mortgage deal.
Find a fix if you want to futureproof your mortgage against an interest rate rise
With an interest rate rise likely in 2022, locking into a fixed deal could be a wise move. Variable mortgage rates depend on the Bank of England base rate. If this rises, then your monthly payments will go up. Fixed rate mortgages can be less flexible than variable mortgages however your monthly payments are fixed. These will not change with an interest rate rise. This will give you peace of mind that you know exactly how much you will be paying over the term of the loan.
Find yourself a mortgage broker
Having a good mortgage broker on your side can be worth their weight in gold. With different lenders having varying criteria for acceptance, the mortgage process can be complex. A broker, with their expert knowledge of the mortgage market, can help to match you with a lender that is more likely to accept your application.
Brokers also have access to many deals that aren’t available from the high street, only via intermediaries, so they will widen your chances of finding the right mortgage deal for you.
Some brokers will charge a fee upfront for their services, others market themselves as fee-free (they claim their fee from the mortgage lender once the deal has gone through).
So Smart Money are mortgage experts and can help you to secure a remortgage deal to help beat the interest rate rise.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE