Should You Be Switching Mortgage Providers More Frequently?
3 minute read
Given the record low interest rates that are continuing into 2017, there really is no better time to consider switching mortgage providers – so why aren’t we? Research suggests that many homeowners still do not switch mortgage providers in the same way as they switch utilities. The savings can stretch into thousands of pounds, so you’d think switching mortgages would be well worth an hour or two of anyone’s time.
Switching Providers Could Save You £2,800 a Year
The latest research by YouGov has found that three quarters of British homeowners have stuck with their current mortgage lender, despite the fact that switching could save them £2,800 a year. Homeowners are twice as likely to have switched energy providers as their current mortgage lender, even though the potential savings are much less. As an example of the savings that could be made, someone with a £150,000 mortgage over 25 years on their lender’s standard variable of 4.5% could reduce their monthly payments to just £624.16 by remortgaging to a fixed rate deal at 1.84%. That’s an extra £200 a month that could be in their pocket and not the lender’s.
“Too Complicated and Too Much Hassle”
When asked why they had not switched their mortgage deal, one fifth of the respondents said they thought the process would be ‘too much hassle’, while a further 14% said it would be ‘too complicated’. One in seven said they had not switched because they thought they would be penalised for doing so, while 7% had decided to stick with their current lender out of loyalty. However, the truth is that switching mortgages has never been easier, or given the record low-interest rates, potentially more worthwhile. Technology means you can compare mortgages with a couple of clicks of a button without having to shop around yourself, and there are also plenty of mortgage advisers out there who will find the best deal for you.
Should You Switch Your Mortgage?
The ultra-low interest rates have seen a surge in remortgage deals over the past year, but when could a remortgage potentially be right for you?
- You’re on the lender’s variable rate – but unsure when this may change
- Your current deal is about to come to an end
- You want a better rate
- Your home’s value has increased significantly
- You want to overpay and your lender will not let you
- You want to switch from an interest-only to a repayment mortgage
- You’re worried about interest rates going up
- You want to borrow more
If now is the time to switch your mortgage, a mortgage adviser will help you compare the rates available and provide the impartial advice you need to find the right deal. For more information please get in touch with our team today.