On the 2nd August 2018, the Bank of England raised interest rates for only the second time in a decade, taking the base rate up to 0.75 percent. This means that the 3.5 million borrowers who are on variable and tracker mortgages could see their monthly bills go up as lenders look to pass on the costs*.
With the latest increase in mind – it is vastly important that if you are coming to the end of your current mortgage deal, you plan ahead well in advance and understand the implications and potential impact on the amount you could actually end up paying when you move onto a standard variable rate. Take action sooner rather than later!
Mortgage advisers will be on hand to help if you are unsure and they will usually suggest that re-mortgaging would be the best solution for someone in this situation.
Remortgaging is usually the best solution and can be used for many reasons:
- You’re coming to the end of your current deal
Once the deal ends on your current mortgage, you’ll probably be moved onto your lender’s standard variable rate which will usually be significantly higher than other rates you might be able to get elsewhere.
- Your deal’s no longer right for you
Your situation may have changed either personally or professionally, making it preferable for you to change the rate you are paying. Potentially you may want to increase the amount you are repaying, for example if you get a pay rise.
- You want to try to cut costs or consolidate debts
If you have built up a large amount of mortgage debt over time, then re-mortgaging could lead to large savings being made. However, it is critical you work out in advance what the ideal rate for you would be.
How easy is it to remortgage?
Getting any type of mortgage is tougher these days and you can’t rest on your laurels just because you’ve managed to get a mortgage from a lender before, especially if you are no longer in permanent employment and your situation has changed. This is because lenders can struggle to understand how contractors operate their finances and each lender will vary how they assess your income.
Finding a Mortgage Adviser who specialises in helping contractors may save you time and money, because if you have an application declined it can have an adverse effect on your credit score.
You can often secure a new deal up to six months in advance of your product ending, so applying early on is a good idea to give you plenty of time to go through processes such as seeking an adviser, approaching your current lender, and completing the application as well as helping you avoid spending unnecessary time remaining on a higher rate.
Blog written by: Jo Elwell – Financial Services Manager – Brookson Financial
How Brookson Financial Mortgage Team can help
Brookson Financial can often source mortgage rates that are not available to you directly – that’s why we can identify competitive mortgage deals based on your circumstances We provide a free initial 30-minute consultation with no obligation, so you can be confident that our advice is honest, independent and specific for your needs. Call 0345 058 1280 or email firstname.lastname@example.org