Actually, for many people, it’s an easy answer.
If you’re considering remortgaging and you have a low loan to value then you’re in a strong position to get a good fixed rate. Your LTV is what you owe on your mortgage compared to value of your home),
If your fixed mortgage deal is almost at an end, then now is also a good time. Especially if you’re already on your lender’s standard variable rate (SVR).
Why Fix Your Mortgage?
Mortgage rates are right now at record low levels. Choosing a five-year remortgage (or longer) would mean you would be sheltered from the impact of a base rate rise for years to come.
A fixed rate mortgage has an interest rate that doesn’t change for a set period. Terms vary from anything from two to 10 years. Your repayments stay the same every month. So you don’t need to worry about fluctuations in interest rates.
In recent months, more and more remortgagors have clearly understood this. Moneyfacts.co.uk 37% of remortgagors opted for a fixed five-year deal in July. That’s the greatest number to date.
reports that there’s a big move towards longer-term remortgage deals. It says that
With inflation running at 2.9% in August, we’re all seeing our spending power eroded. This isn’t going to change until at least early next year. Inflation is forecast to be at or around 2.75% over the second half of 2017, according to the Bank of England Inflation Report.
Security in Knowing Your Outgoings
So fixing for a longer period is increasingly attractive to borrowers. This is because it gives them real control over at least one aspect of their outgoings.
In the UK, more people are locking into five-year fixed rate deals in an attempt to beat a rise in base rates. There’s uncertainty about these right now. But the one certainty is that rates are highly unlikely to get any lower. In fact as inflation increases, the pressure for an interest-rate rise is starting to build. Many financial forecasters predict this must happen soon.
On top of this, the UK is facing a flat housing market. So opting to stay put and rein in expenses by fixing your remortgage deal is proving more appealing than selling up and moving on.
Many fixed-rate mortgages come with a fee. But it seems a growing number of remortgagors are prepared to shoulder the total cost of the deal in return for the financial stability they’re getting.
Take Advantage of Supply & Demand
Many advisors say that the time to remortgage to a fixed rate, if that’s what you want, is now.
That’s because when the signs become strong that an interest rate is in the offing, more people rush to secure a fixed deal. But every mortgage lender will only permit a certain availability on each deal they offer. In other words, when they’ve fulfilled their allocations they’re gone. So it’s better to get in early.
So how do you go about it? Begin by looking at the best buy comparison tables once you have worked out your LTV. We’ve a checklist here to help you do that.
But be aware that you may not be eligible for them all. Comparison sites won’t give any information on the credit rating that you need. Nor if your particular circumstances will mean you will be approved.
To save time on wasted applications, you may well be better to use a mortgage advisor.