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Are your mortgage payments increasing?

Remember to re-mortgage and avoid paying your lender’s variable rate

Wednesday 23 January, 2019

Thomas Oliver’s Hertfordshire Mortgage Brokers and protection specialists, Vishal Gulrajani and Thomas Wheatley recommend that clients re-mortgage as soon as their fixed rate mortgage ends to avoid paying their lender’s variable rate.

Happy New Year to all our clients. Now Christmas is behind us many people are looking for ways to save money in January to compensate for the overspending in December. Don’t worry we all do it and one of the biggest ways you can save money is through reducing your mortgage payments. 

For anyone on a fixed rate mortgage which is ending in the next three months, (especially those already used to paying low mortgage rates) please remember you could be paying more than you need if you forget to re-mortgage. We’ve been accustomed to low mortgage rates for over two years now. According to information obtained from Money Facts the average mortgage rate in January 2017 was 2.31 percent and the average variable rate is currently 4.9 percent.   

Borrowers need to be careful as not re-fixing your rate normally automatically incurs the lender’s variable mortgage rate. To give you an idea of the impact on your payments. This is Money have produced this example. If someone takes out an average £200,000 mortgage over 25 years on a repayment basis payments would increase by £279 a month if you use the average fixed rate and variable rates. This is a considerable amount of money and will negate any savings you may make from switching insurances, gas bills, electric bills, water rates during 2019.

Vishal Gulrajani, Mortgage Broker in Goff’s Oak & Cheshunt, Hertfordshire said:

‘Mortgages are the biggest debt that most of us will have during our lifetime and therefore should be priority number one. As a result by using a mortgage broker who can help you shop around for the best mortgage rate you should benefit considerably. This is especially the case if you have other requirements. For example if you want to make 20% overpayments, require a mortgage with no early redemption charges or a part repayment and part interest only mortgage. Remember a bank can only offer you products that they provide so it may pay to shop around and look at the whole market to find a product that is right for you. I have seen a considerable number of clients recently who are under the impression they can’t do something, or there is a maximum borrowing limit because their current lender has told them. In fact sometimes there in total disbelief when one of our mortgage broking team gets them a new mortgage offer.’

Thomas Wheatley, Mortgage Broker in Tottenham, North London said:

‘Overall people are now used to low mortgage rates so re-fixing or re-mortgaging is essential if you don’t want to see a dramatic jump in your expenses. However please be aware it is not appropriate for everyone which is why it is important to seek mortgage advice. For example if you’re moving house within a year it may not make sense to lock yourself into a fixed rate mortgage and pay an early redemption charge to get out of your mortgage. This is why our mortgage brokers at Thomas Oliver look at the bigger picture and your future aspirations when we offer you mortgage advice. Every individual is unique and has different financial requirements so we aim to find the right mortgage product for you. For more information call a member of our mortgage broking team on 01707 872000. We offer a free initial consultation.’

For more information read: 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments.

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