When you first put your pen to your mortgage agreement, it can seem pretty daunting – durations of 25 years and over are a long time for anybody to commit to a single financial arrangement.
But sticking with the same provider for the whole term of that agreement is something that very few homeowners actually do.
Lots of mortgages come with favourable terms, but as Liverpudlian beat combo Echo & The Bunnymen once remarked, nothing lasts forever.
When these terms come to an end, it might be a good idea to look elsewhere so you avoid paying over the odds. As with many financial products, it can pay to be proactive.
It might seem easier just to sit around on your current deal, but shopping around can save you serious money, and just a few percentage points can yield surprisingly meaty results.
Subject to circumstances, a person with a £100,000 repayment loan with 20 years remaining on their mortgage with a Standard Variable Rate (SVR) terms of 4.99% could remortgage to something more favourable – in this instance, we’ll use Natwest’s 2-year fixed rate deal at 3.49% - and their repayments would drop from £659 to £579 per month – that’s about £960 per year.
We don’t know about you, but we could think of plenty of more interesting things to do with the thick end of a grand than to plough it back into your home.
Of course, there is the cost of switching to consider, but by using Gocompare.com to check for the best remortgage rates and taking a trip to your friendly independent financial advisor to make sure that you’re not getting yourself into something which looks good from the outside but might be more expensive in the long run, you could be in line to net a great deal. Check the terms and conditions carefully, and remember that the cheapest might not necessarily be the best.
Finally, before switching, contact your existing lender and inform them of your better offer – they might decide to offer you a more favourable deal.