Remortgaging this Autumn? – Take mortgage advice now
Thursday 14 September, 2023
If you are one of the 400,000 homeowners whose fixed rate mortgage deals ends between July and October 2023 you will benefit from taking mortgage advice now.
Thomas Oliver mortgage brokers are experienced mortgage advisers who can review the mortgage market to find you the most suitable mortgage product for your circumstances. Call our mortgage broking team on 01707 872000 for personalised remortgage advice.
Anyone whose two-year fixed rate mortgage deal ends soon could pay significantly higher mortgage costs
During Covid the government tried to keep the housing market buoyant by introducing a stamp duty holiday. Many homeowners who fixed their mortgage in 2021 on a two-year fixed deal are now looking to remortgage. This includes many homeowners in the South East: London, Kent, Essex, and Hertfordshire who took advantage of the stamp duty holiday during Covid.
According to The Times, the average two-year fixed rate deal back in December 2021 was 2.34%, but today the average two-year fixed rate is 6.72%.
How much will your new two-year fixed rate mortgage cost you?
As an example, if you were borrowing £200,000 over 25 years on an interest only mortgage you would be paying the following:
- On a two-year fixed rate deal in December 2021 at 2.34% = £391 per month
- On a two-year fixed rate deal in August 2023 at 6.72% = £1,120 per month
‘As the example above shows, the dramatic rise in mortgage rates since 2021 means anyone renewing their fixed rate deal in the next four months could well pay considerably more, even double as much for their monthly mortgage costs.
In this example where someone is borrowing £200,000 at 2.34% the cost is £391 per month, resulting in their yearly mortgage costs of £4,692, compared to a mortgage deal in 2023 at 6.72% which would cost £1,120 per month or £13,440 for a year.
Now if the homeowner was to remortgage at current rates it would cost them approximately £8,748 more each year.
For most people this is likely to be their most significant monthly outgoing. We recommend that you check your mortgage product terms and conditions, so you know exactly when your mortgage renews. Doing nothing is not a good option for most people as it may cost you significantly more in the long run. If you wait until your mortgage is due to renew you will have no choice and will have to move to your mortgage lenders standard variable rate.
Remember there are things we can do to try and reduce the cost of your future mortgage payments if you act ahead of time.
We recommend you speak to your Thomas Oliver mortgage adviser at least six to nine months before you renew your mortgage deal as we can secure a mortgage deal in principle to protect you if mortgage rates keep rising.
Nobody knows what will happen to interest rates, but they have gone up very quickly and as the latest inflation data worried the markets there is the concern that inflation will remain higher for longer than was anticipated which may mean interest rates go higher too.’
Mortgage lenders continue to pull mortgage deals
Another reason why we recommend organising your remortgage deal well in advance is because of the unpredictability of the mortgage market. We are seeing some mortgage lenders pull mortgage deals with very little notice.
If you have secured a mortgage offer most mortgage lenders will honour it, even if they pull the product. The mortgage lenders are being overwhelmed with applications and as they don’t want their mortgage deals to be significantly cheaper than their competitors and they can’t process the number of applications they are receiving they often have no choice but to pull the mortgage product. This is causing uncertainty in the mortgage market and if there are fewer mortgage deals going forward at more expensive mortgage rates it is going to be harder to secure the mortgage deal you want.
Call Thomas Oliver on 01707 872000 to discuss remortgage deals
If you are looking for a local mortgage broker who operates across the southeast and offers mortgage and protection advice suitable for your financial circumstances call the Thomas Oliver mortgage broking team now. Our mortgage advisers can discuss your mortgage options, review your income and expenditure, and assist you in completing all your mortgage paperwork. We can also liaise with your mortgage lender so you can get an offer agreed quickly. If you are looking to remortgage this summer don’t delay, take mortgage advice as soon as possible.
Mortgage lenders are pulling mortgage products but if your mortgage is due to renew in the next six to nine months don’t delay, act now and call or complete our booking consultation form.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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