UK house owners are now faced with a precarious decision. Low interest rates are making it possible to potentially save hundreds per month off the mortgage payment. A heavy amount of competition within the lender community is creating an attractive arena for borrowers to come in and possibly save hundreds per month through a remortgage. Interest rates are equal to or below record levels.

Lenders are offering fixed rate deals which are extremely attractive and many house owners are taking advantage of them. Back in 2012, many house owners entered into a five year deal. That five year deal is now at the half way point and many borrowers are surfacing in search of a deal which could potentially rival the one which they are currently under contract with. The only obstacle standing in the way is the penalty which is usually part of any mortgage lending contract for early withdrawal.

Interest rates are now so low that house owners in many cases can opt out of their current mortgage agreement and pay the fine, making up the difference in just a few months. The fine is typically 3% of the balance on the mortgage.

The remortgage market is seeing more activity since interest rates descended so low.

David Hollingworth, of London & Country, commented on the possible opportunities available for those considering a remortgage, saying: “Remortgaging early won’t work for everyone, but with the way rates have plummeted recently it means there could be good opportunities to save despite early repayment charges.

“The key is not to look just at how much you can cut your monthly repayment by, but at how much you will save over the whole deal. The longer you have been tied into a higher rate with your current deal, the more likely it is to make sense to move.”