At the start of 2020 few of us will have anticipated the upheaval and distress that this year would bring and for some, as it comes to an end, there’s continued uncertainty about their finances and, in particular, their mortgage repayments and how they can afford them in the future.
It’s an ongoing concern and the reason why Embrace Financial Services is now encouraging existing homeowners – and even those on the road to buying for the first time – to review their mortgage arrangements as soon as possible and find out if they could save on their mortgage repayments and if a better deal, to meet their changing circumstances, could be found.
- If you’ve got a two, three, four or five year fixed rate mortgage i.e. one where the interest rate is fixed for a set period, it’s possible you may be able to get a better mortgage rate now and ultimately reduce your monthly mortgage payments. The reason is that the UK’s Bank of England base rate – which influences the mortgage rates set by lenders – was higher in the period from 2015 to 2019 than it is now. Currently its just 0.1% compared to 0.5% in 2016 and 0.75% in 2018 meaning you could be paying more than you have to for your mortgage loan.
- Many existing fixed rate deals may be coming to an end in January and February next year and, if so, you may find you are automatically placed on the lender’s standard variable rate, leading to higher monthly repayments being due. Taking action now could avoid this.
- Recent figures(*) have highlighted that fixed rate mortgage rates have begun to increase – partly due to lenders ‘protecting themselves’ against the impact of the current crisis. By acting now, you could ‘fix’ your deal before further rises are applied. Most lenders will agree to ‘hold’ the rate you want for up to three months, despite any subsequent increases that might be applied.
- Whilst many homeowners think that a mortgage holiday (which allows them to stop making mortgage payments to their lender for up to six months) may be the best solution for them, the payments will still need to be made in the longer term. Whilst a good short term solution, it doesn’t take away from the fact that your existing mortgage deal might not be ideal and, even though delayed, you could still be paying higher monthly repayments than you need to.
- There’s a chance that, by reviewing your mortgage and remortgaging, you may be able to raise capital for use in other ways. Whether using it for business purposes, debt consolidation or for home improvements remortgaging could be a great option particularly if you’ve seen your income, bonuses or commission payments fall due to the current crisis.
- At Embrace Financial Services we have access to literally hundreds of mortgage deals from most of the UK’s leading high street lenders – some offered exclusively to us. By talking with one of our Financial Consultants you’ll have the chance to discuss your current mortgage arrangements, whatever they may be, and find out what other deals may be on offer to suit your personal circumstances and budget. And, the best bit is, it will mean you don’t have to do the leg work yourself.
So if you are worried about your finances, and whether you are currently on the best mortgage deal, why not book an appointment with Embrace Financial Services today to ensure that, despite current uncertainties, you might face a more confident financial future in years to come.
(*)Moneyfacts UK Mortgage Trends Treasury Report