Many homeowners have been benefiting from historically low Bank of England Base rates over the last decade.
These low interest rates have helped many to either buy homes or continue to live in their homes during several years of uncertainty and ‘budget-tightening’.
In addition to low interest rates, many mortgage lenders have been offering borrowers discounted interest rates during the first few years. The argument is that new homeowners are cash poor and an initial low rate helps them to pay for all the costs associated with buying a new home. Unfortunately, these initial rates will, eventually, come to an end and when they do the cost of your mortgage may change - sometimes dramatically.
The same is true of capped or fixed rate deals where interest rates might have been set at a certain figure, which will revert to a known variable (such as the Bank of England Base Rate or the lender’s Standard Variable Rate) at the end of the fixed rate period.
All of the above mentioned indices are largely linked, in reality, with most lenders setting their SVR (Standard Variable Rate) a little higher than the Base Rate of the Bank of England. However, the SVR for each lender may be more or less competitive and as such it’s worth shopping around whenever your rate reverts to the lender’s SVR.
Tracker mortgages that are linked to indices like the current Bank of England Base Rate or LIBOR tend to be more predictable as both indices are published regularly and are set, either by the Monetary Policy Committee of the Bank of England or by the major banks in the case of LIBOR.
Many lenders will notify you when your fixed term is due to end, but some may not. If you arranged your mortgage through a Mortgage Adviser, it is likely that they will be in touch before your fixed rate finishes so that they can search the market for a new mortgage product for you.
If your property has increased in value since you took your mortgage you are likely to obtain a more favourable rate.
If you have more disposable income than before, you may qualify for a deal that you could not previously secure.
We recommend that you always take professional independent advice from a mortgage broker who can look into these factors for you when considering a change in your mortgage provider.
Contact us today on 01628 507477 to speak to an advisor.
Download our Free First Time Buyers Guide
Recent posts
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
Almost half of young adults are worried about their credit history stopping them from renting or buying a property, according to data from Loqbox
How to add value to your property this summer
12 days ago
Different seasons can have a noticeable effect on property prices.
Research from Zoopla shows that spending out on certain features can fetch up to £29,000 during the summer months.
Monday 22nd June saw Keir Starmer resign as Prime Minister and Labour leader. The resignation does not directly impact mortgage rates, as changes were taking place before this announcement. However, it could influence mortgage rates indirectly through financial markets and future government policies.
Homebuying reform to cut homebuying times by around four weeks, and save first-time buyers around £650, says the government.
Buying your first home is a huge milestone, but it can also be a complex process. There are several factors a first-time buyer should consider before making an offer on a property, including understanding the difference between leasehold and freehold and checking council tax bands.
We’ve detailed some questions you can ask your estate agent to help you make an informed decision.
Signs it's time to remortgage
21 days ago
Remortgaging means switching to a new mortgage deal. This will either be with your current lender or a new one.
Getting advice and moving to a new deal when the time is right can mean lower monthly mortgage payments, better interest rates, or releasing equity from your property.
Here are some signs it may be time to remortgage.
According to Nationwide Building Society’s latest House Price Index, house prices dropped 0.6% month on month in May – the first monthly decline this year.
More information
Trusted by
