With interest rates expected to rise in the near future, the topic of mortgage rates has very much been a prominent one recently. There is little surprise that almost everyone is looking to lock down a low mortgage rate but naturally, not everyone’s mortgages are up for renewal. As a result, we thought we would look at when it is realistic to look for a new deal.
At Specialist Mortgages, we like to stick to a five-month rule as this allows plenty of time for the broker to research the best products in the marketplace for the client. This will give you plenty of time to consider the options that you have available and you can then begin to look at completing your application with your chosen lender or by using a broker such as ourselves to simplify the process.
Generally, if you are three months away from renewal there is still time for us or the lender to secure a product and lock this rate until your current deal is up. Another option is to have your current lender transfer your product over to a new one on the day that your deal is up.
A lot of people assume that if the deal is more than three months from renewal that it is not worth looking at other deals but this is simply not the case. In a lot of instances, you can switch your deal at any time so it is always worth checking what products are currently available on the market.
Of course, not everyone has the knowledge and time to keep an eye on the marketplace which is why a brokerage firm such as ourselves can streamline the process so that you don’t have to. The key thing to remember is that if you are fixed at a higher rate for a set period of time then the APRC now could save you considerably each month.
Another aspect to consider when thinking about switching mortgage rates would be the penalty fees that are often associated with early repayments. A lot of people see these as a deterrent but it is certainly still worth exploring your options before you let this put you off. Indeed, some lenders can even waive the fee in certain circumstances whereas others may offer cashback which could work as an offset against the early repayment charge.
Of course, there are other costs to consider as well when you are looking to switch and these include valuation, legal and product fees. Some lenders will offer free legals when you make the switch so these products can also help offset any existing costs.
With interest rates widely expected to go up shopping around for the best mortgage deal is more important than ever before but not everyone has the time and ability to do this. If you fall into this category then we could be the ideal solution.
Our industry knowledge and long-standing relationships with the various lenders in the industry can allow us to source the best deals in the timeliest manner possible. Get in touch if you’re getting close to that all-important renewal date and we can help!