Homeowners Could Be Missing Out Savings and Paying More than Necessary on Repayments

Homeowners Could Be Missing Out Savings and Paying More than Necessary on Repayments

Homeowners could be missing out on a lot of money. By not remortgaging when possible, they are essentially paying higher repayment amounts than necessary. Not only are those that have let their mortgage deal without remortgaging missing out on savings, so are those that could choose to remortgage early despite paying a fee to do so.

There are savings that could be found for homeowners, but there are other benefits such as choosing a fixed rate remortgage that could offer a low interest rate security for years to come, as well as those that could cash in built up equity. In a situation for which homeowners release built up equity into cash, they can use the money as they wish. They don’t have to use the money for the home or to consolidate debt, though some do.

According to a recent report by MoneySuperMarket less than thirty per cent of Britain homeowners have shopped for a remortgage, despite there being an average possible annual of savings of £439 and possibly more for some. That means that more than seventy per cent of homeowners have not considered a remortgage despite the many benefits and the security to one’s financial budget and financial health.

Many homeowners according to the report are totally unaware of what will happen to their repayments once their current fixed term mortgage deal ends. Many believe that their providers will contact them, but that is not always the case. Most are simply moved over to their lender’s standard variable rate (SVR) which is a risky situation because it is not a fixed rate and it can quickly be increased by the lender leaving little time for a homeowner to find relief through a remortgage.

Due to the possibility of a rate increase by the Bank of England’s Monetary Policy Committee (MPC) by the end of summer, homeowners are encouraged to shop around for a remortgage and determine what benefits one could offer them.

Sally Francis-Miles, with MoneySuperMarket said, “The UK mortgage market is worth £1.3 trillion so if even a quarter of those with a mortgage can save a few hundred pounds each, that’s a drastic amount.

“As with most financial products, the onus is on the consumer to search for a better deal. For most people, a mortgage is the biggest outlay they have and the largest amount of money they will ever borrow. As a result, even a slight change in a deal can mean saving hundreds a year, or thousands over the lifetime of the mortgage, even after factoring in arrangement, legal and valuation fees. There are many tools online to look at available deals, and remortgaging is far simpler than getting a mortgage when buying or selling, especially if you’re able to switch to a better deal with your existing provider.”

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