Mortgage Mayhem: Why Borrowers Need to Act Fast
As a homeowner, there’s nothing more unsettling than the thought of your mortgage deal expiring. The security of a fixed rate gives way to the uncertainty of a lender’s standard variable rate (SVR), which can be a costly affair. With approximately 1.6 million fixed-rate mortgage deals set to expire in 2024, it’s essential for borrowers to stay ahead of the game.
Mortgage rates are on the rise
Nationwide and Santander, two of the UK’s largest lenders, have recently introduced new mortgage rules that are set to impact borrowers. The length of time you have to secure a new mortgage deal has decreased from six months ahead of your current mortgage ending to four months. This reduction in time frame means borrowers have less time to find a better rate before their existing deal comes to an end.
According to Martin Lewis, founder of MoneySavingExpert.com, this change can have significant implications for borrowers. With the average two-year fixed residential mortgage rate currently standing at 5.96%, and the average five-year fix at 5.52%, it’s crucial for borrowers to act quickly to secure a better deal.
Seeking the help of a mortgage broker can be beneficial
So, what can you do to avoid being caught off guard? Firstly, compare rates now and speak to a mortgage broker to explore your options. It’s also worth talking to your current lender to see what they can offer you. This is known as a “product transfer,” and it may be a viable option for you.
When comparing rates, make sure to take note of all the important details about your current deal, including your current rate, the terms and length, and any exit fees, as well as your loan to value (LTV). This will ensure you get an accurate price comparison.
Be prepared when applying for a new mortgage deal
If you do decide to secure a new mortgage deal, be sure to check if you’d lose any fees if you decide to ditch your agreement later on, should something cheaper come along.
In conclusion, the changing mortgage landscape can be daunting, but by being proactive and staying informed, you can avoid the pitfalls of a lender’s SVR. Remember, it’s essential to act quickly to secure a better deal, and seeking the help of a mortgage broker can be beneficial in navigating the complex world of mortgages.
