When seeking a loan, the number one thing most borrowers are concerned with is the interest rate. They very well should be as the interest rate is the cost of borrowing. The higher the rate, the more money that will be charged for borrowing. The lower the rate, the more savings that can be found in comparison to a higher offered rate. It makes sense borrowers would be concerned to find the lowest interest rate remortgage or mortgage, but there is a catch.

Whether the borrower is seeking a mortgage on a property or a remortgage, they are going to have to pay to borrow the money. The lender will charge a fee for borrowing the money and overseeing the maintenance of the loan. After all, there are charges involved in the paperwork and processes in completing a mortgage or mortgage. There is also the risk in loaning the money to the borrower. Again, there are costs involved beyond simply loaning the money to the borrower.

Because lending is a profit based business, and it should be, we aren’t arguing that since it is a much needed service, it is important for consumers to be aware of their options. Yes, the lender should make money in loaning to the borrower, but the borrower shouldn’t pay more than necessary on the loan. If there are savings to be found, then certainly they should be found. 

While an interest rate determines the amount of cost in borrowing, it is often smart to seek out the lowest interest rate possible. It seems like an easy mission to take on when shopping around for a mortgage or remortgage. However, the lowest interest rate deals are often associated with higher fees. Those fees could counter any savings the lowest rate offers. Not always, but it often can be the case.

By looking beyond the lowest interest rates offered, and considering those that are slightly higher and have lower fees the balance could be shifted to truly offer the best savings overall.

For instance, if the lowest mortgage or remortgage interest rate has a £500.00 fee, and over the term the interest rate offers a slight savings against that fee, it makes sense to consider that deal. However, if there is another deal that has no fee, but offers a slightly higher rate it could be that the savings overall is higher. Fees, evaluations, and other costs should be put against any possible savings of one deal over another. In seeking the overall savings of a deal versus just the lower interest rate will make it possible to discover the true best lending offer.

Of course, there are other considerations that may be important. A fixed rate deal with a longer term could have higher rates than one with only a two year term. A borrower would have to consider that the savings may come later when rates rise and they are sheltered from paying higher rates for a longer period because they chose to get a longer term deal.

Discussing all options available with experts and looking over various deals versus only the lowest interest rate deals will help a borrower find the benefits as well as the savings that are best for their needs. With low rates and many products being offered by competitive lenders, the possibility of finding the deal that fits a borrower’s needs could be truly possible in the days and weeks ahead, but it may be one that doesn’t have the lowest rate attached.