For many people, once they have bought their home, the mortgage is nothing more than a monthly payment that comes out of their bank account at the start of the month and the amount of that payment is probably barely considered.
However, every mortgage offers an incentivised product at outset (eg a fixed rate, a tracker rate etc), after which the interest rate defaults to the lender’s standard variable rate.
The lender’s standard variable rate tends to be the highest rate that the lender will charge and is almost always more than the initial incentivised product, and yet many people fall onto this interest rate and never do anything about it. This can cost £1,000’s of pounds over the course of a mortgage!
A key part of a mortgage broker’s role is looking after their clients for the life of their mortgage to ensure that the client is always on the best possible rate. We will always contact our clients in the run up to the end of the fixed rate/tracker rate to carry out a full review of their circumstances and look at the new best option for them.
When talking to clients we will consider:-
Staying with the current lender on a standard variable or tracker rate – this can be the way forwards if you intend to move house very soon.
Staying with the current lender but switching to a new rate (having considered the option of re-mortgaging elsewhere) – this can sometimes be a good option.
Re-mortgaging to a new lender to take advantage of some extremely competitive rates which are available currently.
At the same time it is also possible to:-
-Fix the interest rate for between 2 and 10 years to provide certainty of monthly costs for that period.
-Remain on a variable rate to give flexibility to move home or make unlimited overpayments.
-Reduce the overall mortgage term whilst maintaining previous payment levels due to the competitiveness of fixed rates available.
-Raise additional finance to clear existing unsecured debts, improve the property, secure a deposit for another property etc. Arrange an offset mortgage to take advantage of savings which still gain very little in terms of interest received on a standard savings account.
If you are one of those that have never reviewed their mortgage since outset, you have nothing to lose in seeking advice as to what might be the best way forward for you – you may also actually be surprised at what you can save and how easy the process is.
In addition, if you would like to see what our clients have to say about us we have in excess of one hundred and seventy Google 5* reviews on-line and on our website from satisfied clients (www.innovateml.co.uk)!
Paul Hardingham and Tony Ibson are Mortgage and Protection Advisers at Innovate Mortgages and Loans. Both have over 20 years of experience advising individuals and businesses across the North East of England. They can be contacted for bespoke advice at paul@innovateml.co.uk or tony@innovateml.co.uk or call 0191 284 3723.
