This will no doubt be of interest to homeowners who are remortgaging in the coming weeks or months, who want to ensure they can secure the best possible prices on their fixed rate deals.
Below, Joseph Lane, Founder and Director of award-winning brokerage Mortgage Lane, shares his insight and advice for those coming towards the end of their mortgage term soon, who are looking to take advantage of the deals being offered.
Do you expect other high-street banks to follow suit and lower mortgage rates following the number of major lenders already doing so?
It is likely that other high-street banks will follow suit and lower their mortgage rates. This trend is generally driven by competitive pressures in the market.
When major lenders reduce their rates, it often prompts a response from others to stay competitive, particularly if they notice an increase in applications or market share shifts towards the lenders who have lowered their rates.
How should those looking to remortgage in the coming weeks and months best ensure they are fixing their next mortgage deal with the best lender?
For those looking to remortgage, the best approach is to thoroughly research and compare different mortgage offers.
Consider consulting with a mortgage broker who can provide insights into deals that may not be directly available and can offer a comparative analysis based on your specific financial circumstances.
It’s also important to look beyond interest rates; consider factors such as fees, the flexibility of the loan terms, and other features that might impact the overall cost and suitability of the mortgage.
Is it worth waiting until other banks have lowered rates to secure my next mortgage deal?
Whether to wait for potentially lower rates depends on your individual financial situation and your ability to handle potential rate fluctuations.
If your current mortgage deal is expiring soon or if there are financial advantages to securing a new rate now (such as predictable monthly payments), it may be wise to act rather than wait for further decreases that might not materialise.
However, if you have the flexibility to wait and market trends suggest that rates may decrease further, holding off could be beneficial.
Would it be best to secure a 1, 2, 5 or 10 year fixed rate deal in the current climate? Are the rates likely to drop again soon in your opinion?
If stability in your financial planning is a priority, opting for a longer-term fixed rate, such as a 5 or 10-year deal, is advisable. This would shield you from potential rate increases in the near future and assist in managing your budget more predictably over a longer period.
Given the recent trends where major lenders have started to lower their mortgage rates, perhaps a stabilisation of inflationary pressures, it’s possible that mortgage rates could see further decreases in the near term.
If these positive economic signals continue, securing a fixed-rate deal now, especially for shorter terms like 1 or 2 years, could be advantageous as it might allow borrowers to take advantage of lower rates now with the flexibility to reassess and potentially refinance at even better rates should the downtrend continue.
When should you start looking for new deals when remortgaging?
It’s advisable to start looking for new remortgage deals three to six months before your current deal expires. This window allows enough time to explore the market, compare offers, and complete the application process without rushing. Starting early can prevent you from slipping onto your lender’s higher standard variable rate (SVR), which could significantly increase your monthly payments.
Do you need to prepare for it in the same way as your first mortgage?
Yes, preparing for a remortgage requires similar financial scrutiny as your first mortgage. Ensuring your credit score is in good standing is crucial as it affects the interest rates offered to you. Additionally, having your financial documents organised and up-to-date, like income verification and current mortgage statements, can streamline the application process.
Can you get a better deal by shopping around or is it best to stay with the same provider?
Shopping around is often beneficial as it allows you to compare various offers and secure a more competitive rate. Staying with the same provider might offer convenience and possible negotiation leverage, but it doesn’t always guarantee the best deal, especially in the current competitive climate. Using a mortgage broker can also help in accessing exclusive deals not available on the open market.
Can you remortgage your home to buy another one?
Yes, you can remortgage your home to release equity and use the funds to purchase another property. This is a common strategy for expanding a property portfolio often combined with a buy to let mortgage, a portfolio mortgage or to buy a second home. However, lenders will assess your overall financial situation and ability to manage additional debt, so it’s important to have a solid financial plan in place.