Should I remortgage?

Wednesday, 10th October, 2018
Guildford mortgage broker

This is a question that we hear time and time again. Thankfully, as a Guildford mortgage broker, it is one that we can answer.

However, before we get into the detail, it’s worth pointing out that recent data released through UK Finance revealed that 46,900 new homeowner remortgages were completed in July – over 23% more than the same period in 2017.

Furthermore, the value of renewed borrowing in July was £8.7 billion, which equates to more than 26% than in July 2017.

Is the UK a nation of intuitive homeowners, given how The Bank of England raised interest rates to 0.75% the following month? Or were these homeowners simply savvy and preparing themselves for an interest rate rise on the basis that, after years and years of low interest rates, it was only ever going to go up?

The simple fact is that there’s nothing like an interest rate rise – or even the threat of interest rates rising – to sharpen the focus of those with mortgages. After all, nobody wants to be caught short and faced with increased monthly mortgage payments that stretch the realms of affordability.

Recent interest rate rises do seem to have pushed the amount of remortgaging in the UK to a new high. However, regardless of interest rate rises – real, impending and possible – here are a number of reasons why you should consider remortgaging:

1. Beat further interest rises

As I’ve just covered, remortgaging – particularly when it comes to fixed rate mortgages – could protect you from interest rate rises and ensure that your outgoing monthly mortgage payments remain fixed in line with your monthly income (or at least fixed at a level you’re comfortable with). With many fixed rate mortgage options covering periods of up to 10 years, those who like to know where they are when it comes to mortgage payments my find this appealing. But remember, The Bank of England can also lower the interest rate at any time, too.

2. Avoid the SVR

If your current mortgage deal is about to end then you are likely to be switched over to the lender’s standard variable rate (SVR), which is highly likely to be higher than the one you’re on right now. Remortgaging is a great way of arranging a mortgage with a preferred rate and avoiding the SVR.

3. The equity in your property has grown

If the value of your property has increased since you took out a mortgage, then you may fall under a different loan to value bracket. If the loan to value ratio is smaller, then you might qualify for lower rates.

4. You’re tired of the inflexibility of the fixed mortgage

Whilst the fixed rate mortgage is great for those wanting security and consistency, they often come with a few negative aspects, too. For example, they tend to place limits on how much you can overpay – and penalise you if you pay more than is allowed each year. For example, if you were to receive an inheritance that would, in theory, pay off a significant amount of your mortgage, you may find yourself unable to do so without incurring fines. As part of the remortgaging process, you can wrap any windfalls into the new agreement, thus avoiding fees and arranging a new mortgage with a much smaller balance.

5. You are looking to borrow more, not less

People are always looking to move into bigger and more expensive properties. If that’s you, then there may be competitive mortgage deals available that enable you to borrow more capital without the monthly repayment being as big as you might think it would be.

As with these five reasons to remortgage and the countless others not covered here, the best way of understanding how you can benefit from remortgaging is to contact a mortgage broker. As an award-winning mortgage brokerage in Guildford that deals with remortgages on a daily basis, we can help. Simply contact the team on 01483 238280 or email info@complete-mortgages.co.uk.

By Mark Finnegan, Director at Complete Mortgages

How will the second interest rate rise affect my mortgage?

Tuesday, 7th August, 2018
mortgage broker guildford

After much speculation the second interest rate rise has happened.

As of now, the interest rate is 0.75% following only the second rise by the Bank of England in a decade. In fact, the last time the base rate sat around this region was in 2009 – so it’s no surprise that it’s heading on an upward trajectory.

But what everyone wants to know – particularly those on either a standard variable rate mortgage or a tracker mortgage – is how the interest rate rise affects mortgage repayments.

As per our last interest rate rise article, we’re going to keep it simple and say that the increase of 0.25%:

  1. Increases a £100,000 repayment-based tracker mortgage that matches any rise in the base rate by £12 a month
  2. Increases the monthly payments on a £200,000 mortgage loan by £25

For some, a rise of 0.25% may be manageable. For others, this increase and the possibility – or, if we’re honest about it, the probability – of others further down the line may be unsettling. On this basis, many will now be viewing the fixed rate mortgage as a safer bet given the consistency and stability it represents.

The good news is that there is still a raft of competitive fixed rate mortgages on the market.

Inevitably, in the wake of this week’s news, lenders across the nation will be looking to reflect the rate rise in their products, so those considering applying for a new mortgage or remortgaging will need to move relatively quickly if they are to agree a deal before any changes are implemented.

According to the Guardian, the number of people on a variable mortgage has fallen to 35% from 70% in 2001, so there is a clear move towards the security offered via fixed rate mortgages.

As a mortgage broker in Guildford, we’ve seen countless people switch to a fixed rate mortgage since the first interest rate rise in November and we now expect to experience a sharp rise in fixed rate mortgage applications in the coming weeks. And, as a Guildford mortgage broker with access to a comprehensive selection of mortgages that includes some of the most competitive deals on the market, our advice is don’t waste time.

If you’re either about to apply for a mortgage or are thinking of switching your mortgage from variable to fixed, then contact us on 01483 238280 or email info@complete-mortgages.co.uk.

By Mark Finnegan, Director at Complete Mortgages

Why the sudden interest in interest only mortgages?

Friday, 23rd February, 2018
interest only mortgages

First it was the interest rate rise. Now it’s the interest only mortgage. So, what’s with the sudden interest in all things interest-related?

Well, an interest rate increase is always enough to create debate (and keep an eye out for more articles from us on this topic as we watch – with interest – to see whether another interest rate rise happens in spring), however the debate around interest-only mortgages is a reoccurring one.

It wasn’t until the financial crash of 2007/8 that interest rates found themselves under scrutiny. Up until that point it was assumed that property prices – and therefore equity – was going to continue growing, leaving the homeowner with a pot of gold when they sold their property.

Now, with property prices beginning to slow, it would seem that the opportunity to make money on property like days of old is no longer a sure thing and this has the potential to leave homeowners exposed. On that basis, it’s no doubt one of the reasons why the Financial Conduct Authority has brought the interest-only mortgage back into focus.

According to Which?, new research has revealed that there are three points over the next decade-and-a-half whereby a large number of the UK’s interest-only mortgages will reach maturity, with more recent borrowers most at risk of a shortfall.

If you are currently on an interest only mortgage deal and concerned by the recent media coverage surrounding them, then our advice would be to contact a good mortgage adviser, who will be able to go through the pros and cons of interest only deals in relation to your own circumstances. However, for now, here are a few things you will need to consider.

1. Place your head in the future – not the sand

Will you be able to repay your mortgage at the point of maturation based on your current circumstances and income? If the answer’s ‘no’, then maybe it’s time to switch to a repayment mortgage. There really is little point in ignoring the issue or putting it off until tomorrow. Besides, the sooner you address it the sooner you can apply for a repayment mortgage or remortgage.

2. Seek mortgage advice

As a Guildford mortgage broker, helping people to establish the right mortgage for them is what we do well. And given how it’s our job, we know the mortgage landscape inside out as well as the best alternatives to interest only mortgages currently available.

3. Equity release mortgages may be an option

Even if you’ve come to the conclusion that you’ve gone too far and for too long on an interest only mortgage to be able to pay the balance, there are still options. Applying for an equity release mortgage is one of those – and one that may mean you don’t have to compromise your current standard of living. As an equity release mortgage specialist Complete Mortgages can guide you through this process.

Regardless of mortgage type, we always recommend that you speak with a reputable and trusted mortgage adviser – even if it’s not us. By doing so, you will be able to shortcut the process, save time and energy on researching the market and get professional guidance and advice when it comes to making a decision that’s right for you.

If you’d like to discuss your options when it comes to switching from an interest only mortgage to a repayment mortgage, contact Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk.

By Mark Finnegan, Director at Complete Mortgages

New Year, New Mortgage (but don’t leave it too late)

Monday, 29th January, 2018

Now that the New Year is fully underway, we’re urging our clients to start taking steps towards getting a new mortgage.

Whilst there are still a few lenders that are yet to increase their rates in line with the recent interest rate rise, the majority have already done so. Now, if you’re on a fixed rate mortgage then this won’t affect you.

However, if you’re currently on the standard variable rate (SVR) – or are about to enter the realms of the SVR – then this may be of interest.

1. Some lenders still haven’t raised their rates

For those who haven’t been thinking about their mortgage and what the interest rate rise means for them over the last few weeks, there’s still time to switch to a pre-interest rate rise mortgage deal – but you’d better be quick.

2. Beat the New Year rush

Whilst 2018 is in full swing, it can often take a few weeks before people start to really think about their next mortgage move. In fact, sometimes it’s February before the mortgage market really gets going. Put simply, if you act fast we can get you ‘mortgage-ready’ before everybody starts to want to do the same thing.

3. To rise or not to rise

There is already speculation that the next interest rate rise could come as early as May 2018, which means that if you haven’t already noticed the difference to your monthly mortgage repayments, then you may well do if the next interest rate rise comes as early as spring.

As a Guildford mortgage broker that has been in business since 2005, we’re still amazed to see the reaction on our clients’ faces when we explain how easy it is for them to remortgage. It’s even easier if you let a reputable mortgage adviser manage the process on your behalf.

So, if any of the three points raised here are relevant to you and you feel that you’re ready to remortgage – or at least you’re thinking about remortgaging in 2018 – then call us so that we can get your mortgage application underway.

Even if you aren’t looking to remortgage and simply need to arrange a mortgage, either for the first time or on a new property, then call us on 01483 238280 or email info@complete-mortgages.co.uk.

Remember, we also specialise in buy to let mortgages, commercial mortgages, limited company buy to let mortgages, equity release mortgages and adverse credit mortgages.

By Mark Finnegan, Director at Complete Mortgages

How will the interest rate rise affect my mortgage?

Monday, 27th November, 2017
complete mortgages

Well, it’s finally happened.

We knew it was coming, of course; or at least we had an inkling. Those of you who follow the news may even say we had fair warning.

The thing is, a rise in interest rates had to come at some point. Especially when you consider how the base rate dropped to 0.50% way back in April 2009 and maintained that level until August 2016, when it dropped a further 0.25%. The recent announcement was, in fact, the first interest rate rise since 2007.

And whilst it’s good news for savers, those on standard variable rate mortgages and tracker mortgage products are likely to notice the difference, particularly if their level of mortgage borrowing is substantial. As a result, there will undoubtedly be many people wondering how much more expensive their monthly mortgage repayments will become following the hike.

Rather than provide a breakdown of costs based on mortgages valued at X, Y and Z (particularly when there are countless mortgage calculators online that can give you the exact difference to the pound), I’d like to use this article to reassure homeowners with mortgages and let them know that there are still hugely competitive fixed rate mortgages available.

First of all, the 0.25% interest rate rise equates to a monthly mortgage repayment increase of around £18 based on an average 25 year repayment mortgage of £150,000 – or £216 a year. However, perhaps the most important thing to consider is the likelihood of a continued rise in interest rates – something that none of us can predict.

For example, if we take that average mortgage amount of £150,000 and add another 0.25% rise, and then another 0.25%, monthly repayments begin to climb by £36 and £54 respectively; £432 and £648 if we approach it on an annual basis.

And whilst nobody knows when the next interest rate rise will be, it is our job to make our clients aware of the financial implications of further incremental raises.

Our advice is as follows: –

1. Find an online mortgage calculator and understand the implications of further interest rate rises in increments of 0.25% (for many people, this hasn’t been a consideration for almost a decade!)

2. Review your current mortgage; even if the recent rise isn’t enough of a shock to make you switch your mortgage, there’s no harm in reviewing it and weighing up your options.

3. Contact a member of the Complete Mortgages team to find out how we can help you benefit from some very competitive fixed rate mortgages – before they become less competitive. Don’t delay – we have access to some great 5 year fixed mortgage rates which won’t be around forever – speak to one of our advisers now.

Contact Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk to find out more. Remember, we also offer specialist mortgages including limited company buy to let mortgages, equity release mortgages and adverse credit mortgages.

By Mark Finnegan, Director at Complete Mortgages