Martin Lewis, founder of MoneySavingExpert.com, says that now is a good time to remortgage.
Writing on the ITV This Morning website earlier this month, Lewis said:
“Mortgages are at historically cheap rates already. If you can slash £1,000s off your cost and get peace of mind that you can afford it (and if you’re worried about uncertainty, go for a longer fix), then do it.”
Lewis recommends using a broker who can check available deals and find one that suits the individual borrower.
Most remortgage deals will involve a fee, so that needs to be added when calculating how much the monthly repayments will cost.
Borrowers can choose a fixed rate interest rate for a set time or a variable rate that can go up or down. If safety is a borrower’s main concern, then Lewis advises that a fixed rate is likely to be better, even if this means paying a slightly higher rate than the current variable rates.
For further peace of mind, mortgage protection cover can safeguard mortgage payments if a person is sick or has a serious accident.
Lewis says that if you remortgage at a lower loan-to-value (LTV) rate, you can get better rates. The example he gives is a house valued at £150,000. A 91% LTV remortgage is £137,000, which will cost around 4.5% interest. If the borrower uses £2,000 of their savings to reduce the borrowing to 90%, then interest rates can be reduced to less than 3%.