As most mortgage terms provide an alluring offer such as a fixed-rate term that will usually only come to an end at some point, as soon as the headline offer comes to an end your interest will likely rise as your mortgage reverts to the lenders’ standard rate. While the offer could last anything between two and five years, nearing the end of the affordable deal, many homeowners are left wondering how they will be able to survive the impending interest rate rise. The option of considering a remortgage may be the safest option.
When To Consider The Switch
Even though there are several important factors that will define the most suitable time to consider switching your mortgage, it is usually a great idea to start comparing remortgage deals on sites such as habito.com roughly three months before your current deal is about to end. This will allow you adequate time to consider all your options and research the best solution, while it is also crucial to have sufficient time to complete the application process of making the switch. It is wise to ensure that your new mortgage deal starts as soon as your previous one comes to an end.
Factors To Evaluate
You will need to consider your lender’s standard rate if are currently paying a fixed-rate mortgage. However, in the event that the Bank of England’s current interest rate has decreased from when you took out your current mortgage, a remortgage may not be in your best interests unless you are able to find a better variable rate elsewhere.
The option of a remortgage may be able to help you continue to pay your mortgage at an introductory rate for a longer period. You may be required to pay upfront fees for the new mortgage deal as there may be some kind of penalty involved for paying off your current mortgage too soon. It is essential to take all these factors into account when considering a suitable solution.
How Long Will The Process Take?
Usually, you can expect for the application period of the new mortgage to take roughly two months, although, if you are simply changing products with the same lender then you could expect the process to take about one month. This is why it is essential to start the process of comparing deals at least three months before your current deal ends.
Is It Better To Stick To The Same Lender?
It is most often the best solution to simply change products with your current lender rather than switching lenders. Not only will this drastically reduce the time period of the application process but there will also be a lot less paperwork involved. In addition to this, your current lender may be able to provide significant discounts on the upfront fees for the new product, which will help you save significantly. In some situations, a new lender may be able to provide a better deal, although, you can determine the most ideal solution by evaluating what each lender has to offer.
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