Chronicles of a Cheap and Easy Remortgage

by Stephen Brown
Technical Manager moneyQuest

17 November 2007

SVRs are on their way up because the Bank of England is increasing its base rate – it’s now at 5.75 per cent, the highest in five years*.

The Monetary Policy Committee, established by Gordon Brown when he became Chancellor, meets monthly to decide what to do with the Base rate. They take such factors as house prices and retail spending into account. The recent rises have been to cool the housing market to try to stop prices rising at such a fast rate.

In November  – as a result of the recent increases to the base rate - most of the major lenders increased their SVRs. For example, Nationwide Building Society’s is now 7.24 per cent and Halifax’s is up to 7.75 per cent.  This makes it an ideal time to switch to a cheaper mortgage deal.
Take this example - if you have a repayment mortgage for £100,000 and are currently paying 6 per cent interest, moving half way through your 25-year term to a 5 per cent deal will save you almost £5,000.

So, now you’re convinced you want to remortgage – perhaps to reduce your monthly payments or release equity from your home to buy the kitchen of your dreams or go on the holiday of a lifetime.

You’ve probably remortgaged before so you understand the process, and you’ve done a bit of research. In that case, you’ll know there are hundreds of lenders out there, from regional building societies to big high street names, and you’ll have realised how difficult it is to find the best deal for your circumstances.

The range of mortgage products available is so diverse, complex and bewildering that unless you’re a mortgage adviser, you should seek advice from the experts.

Another reason to talk to an adviser is to check the benefits of remortgaging outweigh the costs. For example, if you're locked into a fixed-term deal with your present lender, you may be liable for an early repayment charge (ERC) that could wipe out most of your potential savings.

That’s where moneyQuest can help – our team of experienced and helpful mortgage advisers can scan the market for you and within days you’ll be reaping the benefits of having the most competitive deal. Even bank managers come to us when they want to change their mortgage!

*Rate correct at the of writing.