If your SVR has been hiked, it’s worth comparing mortgage deals now, to find out if you could do better by remortgaging
(PRWEB) February 16, 2010
Homeowners should give remortgaging some serious thought as mortgage deals get cheaper, according to personal finance website Creditchoices.co.uk.
While many homeowners with tracker mortgages have benefited from low interest rates, those on standard variable rate (SVR) mortgage deals are now in a more tricky position, said Chris Eagle, commercial manager at Creditchoices.co.uk.
“If your SVR has been hiked, it’s worth comparing mortgage deals now, to find out if you could do better by remortgaging,” he said.
The standard variable rate (or 'SVR') is mortgage lenders’ basic rate – the one you move onto once the initial deal period on your mortgage is over.
“Many people with a mortgage have put off remortgaging in the last two years, as many standard variable rates or “SVR"s have been low. But several have recently trimmed their mortgage rates on fixed-rate deals and trackers,” said Creditchoices.co.uk’s Eagle.
“Overall, though, mortgages are carrying a substantial premium compared to the 0.5% Bank of England base rate," he added. "More expensive mortgages are a fact of life we all have to get used to.”
Remortgaging checklist – advice from Chris Eagle, commercial manager at Creditchoices.co.uk
1 Check the rate of your standard variable rate (SVR). This could be anything from 2.5% to 6.45% or even more.
2 Think about interest rates. Do you want the security of a fixed-rate deal to protect against rising interest rates in the future?
3 Investigate what your house is worth. Ask your mortgage lender where it currently values your property.
If your house is valued at £200,000 and your outstanding mortgage is £150,000, your equity is £50,000. That represents 25% of the value of your house. This will help you look at mortgage deals for which you should be eligible.
4 Compare mortgage deals. Look at the total cost of remortgaging (including fees) and take expert advice from an independent whole of market mortgage adviser. You can use a remortgage calculator to compare deals online.
For more advice and information on personal finances, visit CreditChoices.co.uk, which also offers free comparisons on hundreds of financial products, from mortgage deals to £1000 loans.