Risk of Shock Mortgage Rise for People Who Don’t Remortgage!
- September 2017 fixed rate mortgages were lowest ever at 2.17% average
- 850,000 home loans may revert to the lender’s standard variable rate (SVR) in next 6 months
- Current average SVR at 4.89% which could mean an increase of £438.06 a month on a £300,000 mortgage with 25 years remaining
According to Thisismoney.co.uk around 850,000 homes could have fixed rate mortgage deals that are coming to an end over the next 6 months.
This time 2 years ago saw the lowest 2 year fixed rate deals, on average, that we have ever seen in the UK and they are due to end. So those people who fail to act could see their monthly repayments suddenly rise as their mortgage switches to their lender’s standard variable rate (SVR).
With average property prices in Oxford standing at an eye watering £478,000, according to Zoopla, that could mean an average increase of £684.14 for any Oxford home owners who miss the deadline and end up paying the SVR.
What Should You Do If You Think You are Coming to The End of Your Fixed Rate Mortgage?
The benefits of switching to a new fixed rate mortgage are already pretty clear but let’s compare the average lender’s SVR to the current average 2 year fixed rate mortgage deal of 2.44%. That £478,000 mortgage would rise by just £64 per month rather than £684, so if you think you might be coming to the end of your fixed rate deal there is no time to waste in arranging your remortgage.
But rates have gone up slightly over the past couple of years so you will have to look carefully to find the right remortgage deal. Check the price comparison websites and speak to a broker to check what are the best rates you might be able to get then compare with the rate your current lender will offer for you to stay with them as a product transfer is often the quickest and easiest way of securing a new fixed rate mortgage. Although, in most instances staying with your existing lender is not the cheapest option.
What If Your Circumstances Have Changed Since Taking Out Your Mortgage?
It is quite common for a person’s circumstances to change over the course of a mortgage and many people wrongly believe they may not be able to get a remortgage because something is different to before. This could be because they have taken a new job or their pay has gone down for another reason. Or perhaps they have had some adverse credit recorded on their credit file that has meant they have been refused for other loans.
But a change in your pesonal circumstances, even a negatitive one, need not mean you are destined to pay your lender’s SVR for all eternity and in fact there are so many lenders that there will undoubtedly be a remortgage out there somewhere just right for you.
At the very least you should be able to switch onto another mortgage with your current lender, this is called a product transfer or product switch, and as long as you have kept up with your repayments it is pretty much, no questions asked. Click the button and sign on the dotted line and your lender should switch you within a few days to a lovely new fixed rate mortgage deal.
If you would like any help with a remortgage or a product switch or anything else to do with mortgages or property, then get in touch and I will gladly give you some free advice. And head over to my about me page to learn a bit more about me and how I can help.