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Is now the right time to remortgage?

Is now the right time to remortgage?

Category: Mortgages

Updated: 09/06/2010
First Published: 09/06/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Mortgage borrowers sitting on their lender's standard variable rate (SVR) have been told that now might be right time to remortgage.

With the Bank of England base rate at a record low of 0.5% since March last year, many homeowners who have come to the end of their mortgage deal over the past couple of years or so have been happily reaping the rewards of low revert-to rates.

However, even though many SVRs still remain low, John Charcol has suggested that now might be a good time to start thinking about remortgaging.

Amongst the reasons why the mortgage broker believes remortgaging away from an SVR could be a good idea is that 16 lenders have increased their SVR since base rate dropped to 0.5%, while cuts have not been seen for almost a year.

In addition, two lenders have increased their SVR this month already, suggesting SVRs are only going to go one way in the future, even if the base rate remains unchanged.

It added that the cost of fixed rate mortgages had fallen sharply over the last few months, with five year fixed rate mortgage deals starting around 4%, their cheapest level since 2003.

Furthermore, the availability and pricing of mortgages at higher loan to values (LTV) has been found to have improved significantly.

However, the broker warns that remortgaging might still not be for everyone.

Anyone paying an SVR of 3.5% or higher, whose LTV is 85% or less, is most likely to benefit from remortgaging, providing they have no adverse credit and do not need to self certify their income.

For borrowers who think they might be better off remortgaging, check out our remortgage best buy chart. Our mortgage calculator should also prove useful in helping you work out your sums.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

 
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