Here at MortgagesRM – Doncaster Fee Free Mortgage Advisor, we have broken this helpful guide to Remortgaging which will help you decide quickly whether to fix your mortgage, how long for and secure you the best fixed rate deal.
Should I Remortgage – Short Answer?
On the 11th March 2020, the bank of England made an emergency rate cut in a bid to reduce the economical impact of the coronavirus outbreak. This meant that the interest rates were cut from 0.75% to 0.25%, a record low since it was last recorded between August 2016 and November 2017. However, on the 19th March 2020, the bank of England made a further emergency rate cut, reducing the rates to an all-time low of 0.10%.
If you have a fixed-rate mortgage, the chances are your mortgage repayments won’t change as a result, however it may be worth checking to see when your deal runs out and also any ‘early repayment charges’ that may apply. You may still be able to save money moving to a mortgage that offers a better rate. Although, anyone on the standard variable rate may see a slight reduction to the amount you pay each month, but this is at the lender’s discretion and not guaranteed.
This is now a great time to consider fixing your mortgage as a new competitive mortgage rates are released in response to the Bank of England rate cut. Don’t make the mistake of waiting for the Bank of England to raise the interests before making your decision because by the point, the best fixed-rate mortgage deals will have gone.
Should I get a Remortgage – The Long Answer?
At the heart of the ‘should you fix your mortgage’ question is a worry that interest rates will soon be heading higher. The attraction of fixing your mortgage rate is the certainty it brings to your mortgage monthly repayments. The interest rate on a fixed rate mortgage is fixed for a specific period of a time and will remain at this rate regardless of the changes to the interest rate in the marketplace.
Once the fixed period expires then the rate will normally convert to the lender’s standard variable rate or another fixed rate if available. Lenders will frequently charge a fee if a borrower wishes to terminate or switch to another interest rate early while within the current fixed term. Some Homeowners who are currently paying their lender’s standard variable rate are vulnerable to interest rate rises. However, while tracker mortgages will move in step with the base rate, lenders can often move their standard variable rates with no defined link to the base rate.