Re-mortgaging could be the best decision you make in 2017.
The number one reason anyone considers doing a new deal on their mortgage is to save money, and the very best deals are those giving borrowers long-term low interest rates. That’s why right now is a great time to secure yourself a low fixed rate mortgage, before the Bank of England base rate begins to creep up once again, taking lenders’ interest rates along with it.
Following the EU referendum in 2016, the Bank of England cut its base rate to a historically low .25% where it has remained ever since (at the time of writing). Speculation about when the Bank will decide to increase the rate remains rife. Some experts have predicted that although the low .25% rate will stick around for 2017. By 2019 it may have risen to around 3%, before eventually reaching pre-recession levels of around 5% - in July 2007 the rate was at a high of 5.75%. All of which means that the time to seize on potentially switching mortgage providers, could be right now - before the best deals run out.
Interest rates aren’t the only indicator that 2017 is a great year for considering a different mortgage lender. The uncertain impact of the UK’s position in the European Union also suggests that homeowners would be wise to start researching the market. In essence, nobody knows what the UK or world economy is about to do, so getting a healthy fixed rate could be just the protection you need to weather the unpredictable storm ahead. In fact, the Council of Mortgage Lenders has said that mortgages today are as affordable as they have ever been regardless of whether you’re a first-time buyer, moving house or switching your mortgage. In November 2011, the average five-year fixed rate mortgage had an interest rate of 4.68%. Today the same selection of products have an average interest rate of just 2.98%; a much more affordable way to borrow money, in other words.
The reasons for switching outlined above could apply to just about anyone but there is a group of people for whom changing mortgage is an even better idea in 2017. These are people whose homes have dramatically risen in value since they took out their current mortgage. If you’re someone in this situation, you may find that you’re now in a lower loan-to-value band - one that would allow you to borrow the amount outstanding on your loan far more affordably.
If it’s been years or even decades since you switched your mortgage product you have much to gain by taking a look at the offers and products out there. But be warned – these good times won’t necessarily last for long. That’s why you should act now and make 2017 the year you make the mortgage swap and make some savings.