Remortgaging has been well and truly in the doldrums since the credit crunch. Not only have borrowers been less confident about releasing equity at a time when nobody’s job feels secure, but for many it simply hasn’t been worth switching.
The historically low Bank of England base rate of 0.5% has meant that, over the last three years, many borrowers were actually better off sticking with their lender’s standard variable rate or long-term tracker. These rates had dropped to such low levels that it often made sense to do nothing. No switching costs, no hassle and no forms to fill in.
However, the mortgage market has changed in the last year and now existing borrowers should look again at their options.
Lenders have pulled out all the stops with their mortgage pricing since the rate war began last autumn and continual price cuts have left us with the cheapest mortgage rates ever seen.
Fancy a two-year fixed rate at under 1.75%? It’s possible. Want to lock into a five-year fix at under 3%? No problem, you have a range of options in today’s market.
As a result many existing borrowers will find that they can significantly better their deal by switching to a new mortgage, saving themselves a substantial sum each month and bagging payment security into the bargain.
For example, the average lender’s standard variable rate (SVR) is now 4.88% according to Moneyfacts, but it’s now possible to switch to a best buy five-year fixed rate of just 2.49%, providing you have plenty of equity in your home.
This means that a borrower with a 25-year £200,000 mortgage would see their monthly repayments drop from £1,155 to £896, a monthly saving of £249, or £3,108 a year. Plus they would be protected from any rises in interest rates for the next five years. Sounds appealing doesn’t it?
Of course, there will be an arrangement fee to pay, and they are currently pretty hefty. But the savings will very often outweigh the remortgage costs. Plus many lenders will throw in a free valuation.
Let ET Law Limited take care of the legals and you could get yourself a very good deal.
Re-mortgage your home for only £199* with ET Law Limited.
Instruct us today on 0161 865 2673 or email email@example.com
*£199 subject to VAT