Getting ready to remortgage and avoiding your lenders super-high standard variable rate
When it comes to switching mortgages you tend to have two options.
- Remortgage: This is when you move to a new bank or building society.
- Product transfer: This is when you stay with your lender and switch deals.
Top mortgage switching tips
With billions of pounds worth of fixed-rate mortgages ending throughout 2023 and 2024 and constant Bank of England base rate increases, borrowers must be more prepared than ever to secure the best remortgage deal.
1) Start the remortgage process early. Start the mortgage-switching process four to six months before your current deal ends, and do everything possible to avoid your lender's super high standard variable rate. The average revert-to rate or standard variable rate is approximately 7.75%.
2) Assess the mortgage market. Before opting for a product transfer and staying with your bank or building society. Most lenders allow customers to secure a new deal well before their mortgage ends. Trinity Financial's brokers will be happy to confirm the best rates and if you should stick with your existing lender.
3) Understand your mortgage options. Beware many lenders do not offer existing customers the same rates as new customers. This means you mean not get a choice of flexible mortgages without early repayment charges or offset deals.
4) What type of mortgage rate do you need? Work out if you need a two-year deal, like a fixed or tracker rate or a three or five-year fix. More of our clients are taking two-year trackers and two-year fixes as they expect rates to come down. This is a fundamental change; everyone wanted a five-year fix until recently.
5) Consider your long-term plans. Check the early repayment charges on a new deal so you know how much it will cost to get out of. Many people lock into five or ten-year fixes for the payment security and have to get out of their mortgage early, either because they want a bigger home or separate from their partner. Not all lenders have high early repayment charges.
6) Your new mortgage repayments. Work out how much your new repayments will be, and if they are going to be too expensive, consider temporarily putting some of the mortgage on interest only or extending the term.
7) Pay off a lump sum. Find out how much more money you need to put into your mortgage to qualify for the next loan-to-value bracket. Paying off a relatively small amount of your mortgage could mean you are eligible for a cheaper rate.
8) Get your property revalued. If you have had work done to your property, ask the lender to send a valuer to revalue the property. You may qualify for a cheaper rate if your home is worth more.
Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
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