How To Get A Better Mortgage Deal | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 18/08/2021

The number of homeowners putting their property on the market fell last month resulting in the market continuing to favour sellers over buyers, research from the Royal Institute of Chartered Surveyors (RICS) found.

The lack of properties on the housing market not only makes it difficult for those looking to take the next step onto the property ladder to find a new home but is also contributing to rising house prices. This means that although homeowners may be able to quickly find a buyer for their current property, they could find it difficult to secure a new home.

As such, some homeowners may want to remain in their own home and wait for the property market to calm down before looking to move home. For those remaining in their home, it could provide a good opportunity to get a better mortgage deal.

For those at the end of their current fixed rate mortgage deal and who are currently on their lender’s standard variable rate (SVR) as a result, or who are nearing the end of their deal, locking into a new fixed rate deal could help to lower their monthly repayments. When looking at fixed rate deal, it is important to consider potential home moves in the future, for example avoid locking into a five year fixed deal if planning to move home within the next three years as it could result in having to pay expensive exit charges to leave the deal early. Fortunately, over the last month lenders have been reducing rates on their remortgage fixed rate deals and there are now sub-1% rates available on two, three and five-year fixed rate deals.

In the two year fixed remortgage chart the lowest rate currently available is from TSB which offers 0.84% which is available to those with 40% equity in their home and charges £995 in product fees. While this is the lowest rate, when looking at the total cost of the mortgage over the two years, which takes into account product fees, there are other more competitive deals available. For example, NatWest, Royal Bank of Scotland, HSBC and Nationwide all offer deals at 1.14% available to those with 40% equity in their home and which do not charge any product fees. More information about all these deals can be found on our two year fixed remortgage chart.

Meanwhile, homeowners who know they will remain in their current home for at least five years may want to consider locking into a five year fixed rate deal, especially as lenders are offering some of the lowest rates on record at the moment. The lowest five year fixed remortgage rate is currently from HSBC, which offers 0.96% to those with 40% equity in their home and which charges £1,499 in product fees. Again, the high product fees means that although this deal offers the lowest rate, when looking at the total cost of the mortgage over five years there are more competitive deals available. For example, NatWest Int Sols, which is only available through mortgage brokers, and TSB both have deals offering 0.99% available to those with 40% equity in their home and which charge £995 in product fees. For more information about all these deals visit our five year fixed remortgage chart.

When looking at getting a better mortgage deal, homeowners should consider their needs from the mortgage, not only the term of the deal but also flexible features it includes such as overpayments or payment holidays, to ensure that they get the best deal for their individual circumstances. To help choose the right deal it may be worthwhile speaking to a mortgage broker who will have access to the whole of market to highlight deals that best suit the borrower’s needs.

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