Re-mortgaging cost cutters

It is a fact that if you’ve had a mortgage for a few years, you’re likely to be paying more than you need to. Remaining loyal to your mortgage provider doesn’t get you any rewards. Their outstanding offers are reserved for their new customers.

Many people could cut their mortgage repayments by 33% by simply re-mortgaging their home.

Check out some of the advertisements in the weekend newspapers, look on the internet, even phone your current lender and ask what up to date mortgages are on offer and you’re likely to be surprised at the savings which could be made by shopping around.

Lenders are in competition to attract new customers and are anxious to attract new borrowers by offering lower and lower interest rates. The more recently established lenders are working hard to gain their share of business. They are fully aware that, having arranged their mortgage, most people will settle down to paying the same amount every month and unless they decide to move to another home, won’t even think about the interest rate which they’re paying.

By making certain that you are getting the best mortgage deal available, you can make big savings. In the life of the average mortgage you could save several thousands of pounds.

There’s a bewildering choice of mortgages and without a doubt it would be a sensible move to get some advice. There’s no need to pay a penny for this – just get on-line and find a mortgage broker who’ll search the whole of the market to find what’s right for you, for free. They’ll be able to tell you about the latest deals available in this fast moving market.

Re-mortgaging is not a long drawn-out process. It should be perfectly possible to complete the transfer from your old lender to your new one in around 6 weeks. Much of the paperwork can be done on-line, saving time and "snail mail" delays.

Although you could face costs of up to £1,000 for a typical new mortgage to be arranged, many lenders will pay your costs and even your legal fees, so shop around to see who makes the best offer. You’ll have to pay around £325 to your old lender when surrendering the mortgage.

Rates vary all the time, but here we give you an idea of the savings that could be made if you have been on your mortgage lender’s standard variable rate (SVR) of say 6.5%. We are using the figure of a £100,000 mortgage.

A switch to a fixed term loan at 4.24% would save over £2,200 per year. These loans are normally available over a two or three year period. Even if there was a charge for an arrangement fee, there would still be a big saving. Buyers with large mortgages or maybe homeowners planning to increase their mortgage to fund home improvements would benefit substantially from these improved interest rates. As we said, rates vary, but you should be able to achieve an interest rate around 2% lower than your lender’s SVR.

If you’re a buy-to-let investor, the probability is that you already have a considerable mortgage and the saving by switching would be very worthwhile. With the increase of value of property in the past few years it may be a good time to consider remortgaging your current investment and thinking of expanding your property portfolio.

So, the savings are there, waiting to be made and your on-line broker will help you. For free!

Remortgages
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