Remortgage Broker Hitchin

Can a remortgage save money?

Monday 12 July, 2021

Many home owners that reach the end of their existing mortgage deal don’t remortgage. If your current mortgage deal is about to end, our mortgage brokers in Hitchin can help. As of July 2021, our best remortgage deal rates are as low as 0.94% for a 60% loan to value.

Why should I remortgage?

Firstly, let’s look at car insurance. How are these products generally renewed?

That dreaded time of year comes, the letter arrives in the post, you open it up and your Car Insurer has increased your premium!

The first thing you do is say to yourself “I am not paying that much”. You jump on a comparison site and find a similar or quite possibly, cheaper policy that may even have an added extra that you did not have on your previous policy… Bonus!

Car insurance policy renewal costs are more likely to be questioned than mortgage deal expiry costs.

The main reason that you should consider a remortgage is to avoid moving to the Standard Variable Rate (SVR) and in doing so, save money.

What happens when my mortgage deal ends?

Did you know approximately 27% of mortgage customers in the UK are currently paying the maximum rate of interest with their current mortgage lender. This is recorded as being up to 6%. This is the Standard Variable Rate (SVR) that is set by the lender which a mortgage will default onto, at the specified expiry date of any given particular product that had been taken out by a mortgage customer.

An additional 18% of people did not even know if they were on the lenders SVR or not. This makes it probable that they are too, paying the highest rate of interest with their current mortgage provider. 

By allowing your mortgage to lapse onto the Lenders SVR, as a result you could be paying up to £4,000 in additional interest per year! Many customers do not even realise that they have reverted to the lenders Standard Variable Rate, or even what this actually means. They also may not be aware of the many possible options that could be available to them by exploring the market and Remortgaging or Product Transferring to a new more cost-effective mortgage deal. For example, a fixed rate mortgage offering longer term security and the ability to budget monthly repayments effectively. In additional, a lender has the discretion to change the SVR at any point potentially costing you even more in interest!

Helping home owners in and around Hitchin remortgage

Having arranged many mortgages for clients all over Hertfordshire including Hitchin, Letchworth and Baldock I feel a professional responsibility to ensure my clients are fully up-to-date and informed of what mortgage deals are available to them. This is done months in advance to the expiry date of their current mortgage deal purely to ensure I can source them the best possible deal and have this ready for smooth transition from old to new – preventing any unnecessary SVR interest!

There can be some confusion amongst homeowners with mortgages, some believe that a Remortgage is a process by which borrowers take on more debt. This may be an option depending on what the additional borrowing may be required for, however, a simple like for like remortgage will likely save you money. Another misconception is that a remortgage involves taking on a second mortgage, not the case. 

Lastly do not mistake that paying a higher interest rate on your mortgage will result in you paying off your mortgage sooner! A higher interest rate is quite simply that- higher Interest. This will have no affect on the capital that is paid off your mortgage from month to month.

Now is a good time to review your mortgage deal

The importance or reviewing your financial circumstances regularly has never been more prevalent!

Even if your circumstances have changed for example, higher debts, lower income, new job, none of this necessarily means that you would be unable to remortgage. In fact, it would be great time to review your circumstances including your mortgage. By using a mortgage broker, you can receive personalised tailored advice. All lenders have criteria’s that differ, and one size does most definitely not fit all.

What are the best remortgage deals right now?

For home owners in Hitchin or the surrounding areas, did you know that you could benefit from a mortgage deal as low as 0.94% on a 60% loan to value for a 2 Year Fixed Rate Mortgage.

What could a 1% remortgage rate cost per month? 

Mortgage Debt = £100,000
Mortgage Term = 25 years
Mortgage Type = Repayment
Interest Rate = 1%
Example Mortgage Fee = £995
Example Cost Per Month = £377

It is important to consider your financial position and always remember that your remortgage deal will move to a SVR after the deal ends. The SVR is determined by the mortgage lender and is not the Bank of England base interest rate.

If you would like to receive cost free, tailored advice on your mortgage and become fully informed of your options available to you, please get in touch and we can arrange a consultation with one of our specialist mortgage brokers at a time and date to suit you.

Cade Somerville

Senior Mortgage Broker in Hitchin

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