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Why not opting for a remortgage can hurt your finances
For those approaching the end of a 2-year fixed deal, if you don’t remortgage, you could be looking at an interest rate increase of 2.64% as you find yourself paying the Standard-Variable-Rate (SVR) (the rate borrowers automatically pay should a remortgage not take place). This means that if you have a £100,000 mortgage, you could be paying an extra £2640 a year and on a £200,000 mortgage, you could be paying an extra £5280 a year than you are now.
Recent analysis of interest rates on various mortgages has shown that a combination of low two-year fixed-rate deals and stable variable rates, makes switching to a new deal even more beneficial now.
According to Moneyfacts.co.uk, those who took out a 2-year fixed-rate deal in July 2017 would have been paying an average of 2.26% on their repayments. Meanwhile, the average SVR is currently 4.90%.
Moneyfacts.co.uk have also warned that this price jump, should you not remortgage, could be set to increase with SVR’s remaining static and the 2-year fixed-rates having decreased further from the 2.26% in July 2017.
Do you want to make remortgaging easier?
Mortgage experts advise to put the wheels in motion regarding a remortgage a few months before your current deal expires so that you don’t end up on the lender’s SVR in the interim and also because you may find an even better rate than the one you are currently on. It is estimated that many people are paying this more expensive rate because arranging a remortgage is often complicated. If you feel this way, contacting a mortgage broker would be an advisable course of action.
Post courtesy of What Mortgage.