When Is It Right to Remortgage

When Is It Right to Remortgage

Homeowners are, according to lending experts, expected to show strong demand for remortgage products in the coming weeks and months. The reasons for remortgaging are many, but perhaps the biggest is to secure a low interest rate. There could be another increase in the Bank of England’s standard interest rate this year. If so, it will mean that without a remortgage homeowners could end up paying more than they have to for their property loan.

To escape paying more, homeowners are expected to seek out a remortgage and secure a low interest rate.

For those who do not seek a remortgage when their mortgage deal ends, their loan will be moved to their lender’s standard variable rate or SVR. An SVR is considered a risky interest rate, as it can fluctuate with little to no warning. That can put a homeowner in a rush to get a remortgage to escape the higher rate.

Homeowners that secured a fixed mortgage a few years ago are currently paying a lower interest rate than they would if moved to their lender’s SVR. On the average, being moved to an SVR could have an owner paying an interest rate of almost double.

So when is it right to remortgage? The answer isn’t easy, because the answer is as varied and specialized as each homeowner’s needs.

Experts suggest that homeowners on their lender’s SVR or those close to having their mortgage deal end consider shopping around for a remortgage. There is no harm in gathering information to discover what deals are being offered and what savings are available. In doing so it might offer the answer needed for that homeowner’s unique needs.

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