Why NOW is the time to check and switch your mortgage
As mortgage rates hit record lows, we look at why now could be a great time to switch to a new mortgage deal and save hundreds of pounds on your mortgage payments.
With a “frenzied” property market and an abundance of homebuyers searching for properties, mortgage lenders are battling for your business by slashing rates and offering more fixed rate remortgage deals.
Mortgage deals go below 1%
Mortgage rates have dropped to record lows which means people looking at moving up the property ladder, or who have a fixed rate deal coming to an end, could secure a remortgage deal at a very low rate.
HSBC and Nationwide are the latest lenders to offer rates lower than 1%, while Barclays, Platform and NatWest have launched fixed-rate mortgage deals with the lowest ever interest rates seen on a two-year and five-year fix.
Banks are offering remortgage deals at low rates as a result of Bank of England interest rates being at an all time low, combined with the stamp duty holiday and the flurry of homebuyers in the market, many of which have large deposits saved in lockdown.
Katie Brain, Consumer Banking Expert at Defaqto, was reported saying: “We haven’t seen rates this low for a very long time and it is great news for anyone looking to remortgage. While the Bank of England kept interest rates low throughout the pandemic, we have not seen this passed on to borrowers like this until now. It has been a turbulent year for borrowers needing a mortgage and it is encouraging to see these new products being offered at such great rates.”
Inflation on course to push mortgage rates up
With interest rates at an all time low and more deals available, remortgaging now could mean saving on your current deal. But don’t expect these rates to stay low for long. With pandemic restrictions easing and consumer spending on the rise, inflation is on course to rise too. Last month inflation rose by 2.1% and if that trend continues interest rates may start to climb back up. So if you want to switch, you’ll need to act fast while the rates remain low.
Remember to look at product fees alongside rates when
When shopping around for a better mortgage deal, an obsession with getting the lowest rate could leave you susceptible to thousands of pounds in unexpected costs. That’s because there are product fees and other mortgage costs to consider. It could be that while you’re saving on the interest rate the cost of the mortgage overall is pushed up by the product fee. Speak to a fee-free mortgage adviser so they can work out the total costs and savings for you.
How to switch your mortgage and save
Check your current deal, how long is left and whether there are any fees or penalties if you switch.
Speak to a free-free mortgage broker. They can across the market to find you the best remortgage deal.
Once you’ve found a remortgage deal, you’re likely to need a conveyancing solicitor to process the switch. But be warned – solicitors are currently struggling with delays due to the sheer demand in the market.