When to review your Mortgage

28th November 2018


For most of us, our biggest monthly outgoing is our mortgage payments. With that number ringing in your ears, you might be interested to know that you could be saving money on your payments. It’s because of these potential savings that it’s important to review your mortgage. But when is the best time to review your mortgage? We’ve broken it down for you.


When your fixed rate deal comes to an end

When you first took out your mortgage, you were likely to have been placed on a fixed rate. This means that for a number of years, the interest rate and your monthly payments are fixed, so you know just what to expect. These periods usually last around 2 to 5 years, with a handful of providers offering up to 10 years. If your fixed rate deal is coming to an end, this is a key time to review your mortgage. If not, you might find that your monthly payments are higher than before. This is because you will be put onto the lender’s standard variable rate (SVR). By switching onto a different mortgage product or a different lender, you could save money.


When interest rates change

In August of this year, the interest rates increased from 0.5 to 0.75% – the highest level since March 2009. Any time interest rates change it is a good time to review your mortgage as this will affect how competitive your current rate is. By reviewing your mortgage, you could take advantage of current rates by locking into another fixed rate. Also, if the value of your home has increased, your loan-to-value ratio may have decreased, meaning you can choose from more lenders at a lower rate.


How much could you save

Let’s say you currently have £150,000 of your mortgage to repay with a remaining term of 25 years. Your fixed rate has come to an end, and you have been placed on the standard variable rate at 4.24%. Your monthly repayments will be £812.


By switching on to a rate of 2%, your monthly repayments will be £636. That’s an annual saving of £2,112.*


It’s important to note that if you are currently on a fixed rate mortgage, you should check the early repayment charges with your lender before considering switching. If you’re on the standard variable rate, it is unlikely that there will be any charges.


How do you know which rate is best?

This is where we can help. We understand that Contractors don’t have time to search for the best interest rates, so let us do it for you. We search the whole of market to find the best deal to save you money. If you looking to review your mortgage as a Contractor, get in touch.


*We’ve used Halifax’s SVR in our example but different lenders have different SVR’s, so check with your current provider what their’s is 

All content is accurate at the time of publication

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