This autumn sees a large number of homeowners see their mortgages mature, providing the chance to reduce monthly mortgage payments by a huge £125 – with those with bigger loans saving even more. People who took out their mortgage loans after 2012 will now have the chance to renew their two and five year fixed rate deals and, considering the house price growth coupled with their mortgage repayments to date, homeowners should have enough capital in their homes to qualify for lower interest rates.
However, it is estimated that one in three mortgage borrowers fail to shop around, instead paying their lenders’ standard variable rate of interest, which perhaps still appear a good deal when we can remember the days of double-figure interest rates. With some lenders offering as little as 1 percent interest right now, it’s a good idea to calculate just how much you could be overpaying. Here are a few reasons why mortgage borrowers should be looking for the best deal possible right now.
Lenders Are Targeting Remortgage Customers
Lenders are increasingly looking for business from customers who are remortgaging – and there are lots of them too. There is a healthy competition in the mortgage market at present, providing many options to homeowners, from new banks, specialist lenders and supermarket banks such as Sainsbury’s and Tesco – so keep an eye on best buy charts.
Interest Rates Are Still Low
We’ve already seen interest rates falling throughout the summer and with this predicted wave of borrowers shopping around looking to renew, this should help bring about even lower rates going ahead.
Easier to Make a Successful Application
Lenders who may have been put off by the stricter lending criteria we saw banks employ back in 2014 should feel more confident that their applications may now be accepted. Rejections are less commonplace in the current market, so those who feel their circumstances have changed in recent years should find a better deal for themselves more easily right now. Don’t end up overpaying for fear you will get knocked back as we find ourselves in much kinder market to borrowers at present.
Take Advantage of Good Deals Now
It pays to be organised. Even if your current deal doesn’t end for a few months, keep in mind that many lenders keep offers open for as long as six months, giving you plenty of time to do some thorough shopping around. If you apply early and let your new mortgage lender know when your current fixed rate ends, you will be transferred automatically and start saving right away.
Good Rates for All Types of Borrowers
Whether you own just 10 or 60 percent of your home, there are good fixed rate deals out there for those on all rungs of the property ladder. The best advice for all mortgage borrowers is to compare the total cost of your new mortgage – monthly payments plus up-front fees which can be hundreds or even thousands of pounds – when looking for the best deals. If your mortgage is worth less than £100,000 you will normally be better off on a low-fee deal, even if the interest rate is slightly higher.
Those who have large sums on deposits can look into offsetting their savings against mortgages, so you only pay the difference, providing flexibility and the potential to pay off mortgages faster and save on interest too.
Clyde Property is a leading independent, multiple award winning estate and letting agent with 30 years’ experience in selling and letting property in Scotland. Just call your local Clyde Property branch today, for friendly, impartial advice on finding your next dream home.
