As we step into the new year, we all find ourselves asking the same two questions.
- How is it 2022 already?!
- How can we save some money this year?
Anyone who watches the news will know, that this new year is looking increasingly expensive to simply carry on with our daily lives.
With food, clothing and energy all increasing in price the general cost of living is going to be putting a squeeze on everyone’s bank balance.
Could a remortgage be the answer?
The monthly mortgage payment is likely to be your highest monthly cost, so making a saving here can really help ease the pressure and make this year a more comfortable one.
The first step for a remortgage is to look at your current deal. You can do this by pulling out the paperwork or by giving your lender a call and asking them to run through everything.
Check your current mortgage costs or deal
The first thing to check is whether you are on the lenders standard variable rate (SVR). If you are, then you need to act quickly! Being on the SVR will be costing you around 2% more in interest than you need to be paying. With the average UK mortgage being £200,000 potentially you could be paying £4,000 a year more than necessary, and with rates due to be increasing further in the coming months, this will only cost you more and more.
At our offices, based in Hitchin, Hertfordshire, we have found that an increasing number of homeowners from Hitchin, Stevenage and the surrounding towns, have been asking us to help them remortgage precisely because of the potential interest rate increase.
Are you on a fixed rate mortgage deal?
If you are still on a fixed rate mortgage, you will need to find out how long you have left on that rate. A mortgage offer will last for 6 months, so if you are within 6 months of your fixed rate coming to an end then you can arrange your remortgage without any issues, there will be a seamless transition between your current deal and your new deal.
In the event that you find yourself more than 6 months away from the fixed rate ending, then you will need to find out how much the early repayment charge will be. This will generally be a percentage of the outstanding balance, so is likely to be a few thousand pounds. The early repayment charge may seem like a lot, but it may be possible to add the extra funds needed to the mortgage and still save money on your monthly payments.
How to find the best mortgage deal
Once you know where your current deal is at, you now need to find the best deal for you. The best way to do this is by speaking to a mortgage broker. At Fortune Financial, our mortgage advisers in Hitchin will do all the leg work for you. We search through 1,000s of products from 100s of lenders to find the most cost-effective deal, taking into account any fees to create a bespoke recommendation for you.
We will talk you through your options and compare your current deal with the best new deal so that you can rest assured you are doing the right thing and saving money, not just for now but in the future.
When we compare your current deal to arranging a new deal it is important to take into account the fees such as the legal and the product fees. It is important to remember that we can only really compare the two products up to the end of your current mortgage fixed rate. This may only be 8 or 9 months, meaning that the saving won’t appear to be much if anything.
However, an important thing to note, especially for this year, is that the Bank of England have stated that interest rates will be going up a number of times before summer, so it is likely that by arranging your re-mortgage now you will be making more savings towards the end of the year.
It is just difficult to know exactly how much you will be saving. The Bank of England have already put rates up, but they still remain low at 0.25% meaning there is still time to secure a good deal before rates hit 1%.
There are a range of products available, each with their own benefits, meaning that there is a product out there to suit all circumstances. From Offset for those with a lot of savings to tracker and stepped rates, there is an option for everyone. A broker will be able to advise which is the best option for you. It may be an option that you have not considered but the savings can be considerable.
How long will it take to arrange a remortgage?
A remortgage will generally take around 4 weeks to arrange from application and, depending when you want the new deal to take over from your current deal, you could start making savings straight away!
So, if you are concerned about your finances for the coming year and you want some free, no obligation remortgage advice, then contact us today. It might be the best thing you do all year!
Read more about our Remortgage Services.
Contact us today for free, bespoke, no obligation remortgage advice on 01462 510 400 or email aaron@fortunefinancial.co.uk or visit us at our office in Hitchin, Hertfordshire.
Cade Somerville
Senior Mortgage Adviser, Hitchin, Hertfordshire
