Switching mortgage deals at the opportune time

Looking to remortgage? Don’t assume you have to wait until your existing deal finishes before you can start the ball rolling. If your current mortgage deal ends within the next six months and you want to lock into a new deal now, it is possible to secure a deal even if you’re currently tied into your existing mortgage.

There’s one risk to watch out for, you might be tied into your current rate and must pay an Early Repayment Charge (ERC) if you switch before the end of the deal. However, in the main, you can remortgage at any time during this period and the new mortgage will start when the old one ends. There’s no point doing it if it’s not likely to benefit you in the long run, so you want to choose a time when there’s a positive benefit to moving your mortgage.

Fixed rate mortgages run for a set term, typically between two and 10 years, and then usually move on to the lender’s Standard Variable Rate of interest (SVR) which is often higher (some currently are over 8%). Whether the interest rate on the new deal is higher or lower than you’ve been paying depends on what’s happening to rates at the time.

You don’t have to stay with the same lender and should certainly shop around to see what’s on offer. The more equity you have in the property, the lower the ‘Loan to Value’ and the better remortgage deal you could get. If you are midway into your Fixed Rate mortgage but still decide to remortgage, an ERC might apply to your current deal. These can be large amounts, but you could consider it if interest rates have dropped since you took out your mortgage as it may be beneficial to you longer term. Terms will apply.

Whatever the scenario, speak to a specialist mortgage broker such as Impact Specialist Finance who has the whole of the market available to them to help you find a suitable mortgage for your needs and requirements.