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Review Your Existing Mortgage To Make Savings

Published: 26 July 2022
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Author: Carl Shave - CEO and co-founder
Last updated: 26May2024

With inflation at a 30-year high, the Bank of England has raised the base interest rate, which in turn affects mortgage rates, with banks upping costs on a week-by-week basis.

Those on fixed-rate mortgages will be safe until the date their deal ends. However, anyone on variable rates may experience changes, with lenders contacting their borrowers to confirm any increase in monthly repayments before implementation.

If borrowers think they will struggle to meet increased – or even current – monthly repayments, it is vital that they talk to their lender and explain their situation.

One option to avoid regular increases is to explore remortgaging with either your existing provider or a different provider. It is worth talking to an independent adviser, who can identify the best deals for individual circumstances. There may be an early repayment charge, but this could be worth it to achieve significant savings overall. With new lenders, you can usually secure a new mortgage rate up to 6 months before your current deal ends; existing providers usually allow new deals with just 3 months remaining.

For new homebuyers, there is growing evidence that gradually increased supply means that house prices are steadying after a period of exceptional growth. This will have a knock-on effect for mortgages, with five-year fixed terms proving popular, enabling borrowers to budget with greater confidence, planning expenditure into the longer term.

Due to the high demand, lenders are struggling to process applications, with approval taking up to 24 days, putting pressure on borrowers to secure the most advantageous deals before rates rise again. In order to get the best value, it’s important not to delay taking action.

Meanwhile, it is worth remembering that, even at 1.25%, base interest rates are still low compared with those affecting previous generations!

Whatever your plans or concerns, Just Mortgage Brokers are available to advise, offering guidance to the most suitable mortgages to meet your financial circumstances, and keep them healthy.

We are here to answer any other questions you may have, get in touch.