The fear of rising rates is driving borrowers to remortgage, new research shows.
According to conveyancer LMS, the number of remortgagors fearing a rate rise has increased dramatically over the last 12 months.
In December 2015, 6,500 remortgagors said they anticipated an interest rate rise within the next year compared to 10,800 in December 2016 – an increase of 66%.
There were 27,700 remortgages carried out in December 2016 and 39% of remortgagors surveyed said they anticipated a rate rise within the next year.
Remortgaging is the process of switching to a new mortgage deal either with the same dealer or a different dealer. The ideal remortgage time is when the introductory or fixed tracker or the discounted rate on your mortgage ends. It is at this point that your rate is moved onto a long-term variable rate usually the lender’s standard variable rate (SVR).
You can also remortgage when the interest rates keep changing. If you are on a fixed rate and the interest rates go down, you may find yourself paying over the odds. If you are using a variable interest rate and there seems to be a likelihood of the interest rates rising, you might want to move to the fixed rates.
When opting for a remortgage, it is important that you first check if your current mortgage has any early repayment charges. You also need to find out how much your lender by asking them for a written redemption statement.
The next step is deciding whether you need to make changes to your loan’s terms. For instance, whether you wish to extend the term or borrow more money. Then consider what type of deal you want. If for example, you choose a new mortgage plan, you need to make a choice between a variable and fixed rate and consider what type of each you prefer. You then take into account what is available and ensure you allow plenty time before your current mortgage ends.
There are several things that you need to consider while remortgaging.
• What are the penalties for opting out of your current mortgage deal?
• All the fees associated with the new deal
• Fees you will incur if you deal with a mortgage broker
• Any legal fee associated with remortgaging
Expert advice is recommended when remortgaging. You can contact us at MAS anytime you have issues or need advice on remortgaging https://www.mortgageadviceservices.co.uk/remortgaging/
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