If you've got equity, you can get a great mortgage deal.
Much is reported about the state of the market for first-time buyers. After all, they are the engine of the mortgage market and without them nobody else would be able to move anywhere.
But there is a massive swathe of owner occupiers in the UK who don’t want to move but are interested in changing their homeloan. These remortgagors have been hard to find over the last two years because switching your mortgage has frankly been far less attractive than it had been for years.
As soon as the Bank of England cut its Base Rate to a record low of 0.5% in March 2009, many of the long-term deals that borrowers revert to at the end of a fixed or discounted rate became extremely cheap – namely standard variable rates (SVRs) or reversionary term tracker products.
Indeed, mortgage borrowers were cock-a-hoop to find they could do absolutely nothing at the end of a deal and automatically revert to a very low rate indeed -- no fees, no switching hassle and no form-filling. It is little wonder that remortgaging levels have fallen off a cliff over the last two years.
But now the tide is turning.
When the time comes to remortgage, our mortgage centre can help you find a great deal quickly and easily
Time to switch?
A combination of factors has come together to motivate the nation’s mortgage borrowers to look again at remortgaging.
Firstly, a Base Rate rise is imminent. Most experts expect the Bank of England to hike interest rates in 2011, with estimates from as early as May for the first increase, although August and October are also popular with economists.
Either way, it means that those borrowers who are exposed to rising rates because they are currently on a variable deal have time to lock into a fixed rate now before rates do go up.
Of course, the differential between low SVRs and fixed rate mortgages is still wide so many may feel they want to take their chances on a new tracker. And if your lender’s SVR isn’t particularly attractive -- Kent Reliance Building Society’s is a steep 6.08% for example -- now could be a good time to bag a good rate. If you have plenty of equity in your property the best tracker deals will be available to you and these can beat even the most competitive lender SVRs.
Lock into a deal
The second catalyst is the fact that fixed rate mortgages have been rising in the last few months. In fact they are currently at their highest level in six months, according to Moneyfacts, at an average of 4.49% for a two-year deal and 5.45% for a five-year fix.
This might make some borrowers feel that they have missed the boat in terms of bagging the best fixed deals, but others will recognise that fixed rates are still going up and have the potential to rise significantly further. Now could be a great time to lock into a deal, especially the longer-term fixed rates which still offer very good value for money.
Whether you want to lock into a fix or get a new cheap tracker deal, switching now could make perfect sense while rates are keen. One thing is for sure, as soon as the Bank of England increases its Base Rate, lenders are bound to hike their mortgage rates.
Below are 30 of my favourite remortgage deals:
13 fabulous fixes
|
LENDER |
DEAL |
RATE |
FEE |
MAX LTV |
|
2-year fix |
2.79% |
£1,995 |
60% |
|
|
2-year fix |
2.89% |
£1,499 |
65% |
|
|
2-year fix |
2.99% |
£1,499 |
70% |
|
|
2-year fix |
3.35% |
£699 |
50% |
|
|
2-year fix |
3.59% |
£995 |
75% |
|
|
2-year fix |
3.59% |
£599 |
70% |
|
|
2-year fix |
3.79% |
£495 |
75% |
|
|
3-year fix |
3.99% |
£195 |
60% |
|
|
3-year fix |
4.19% |
£999 |
70% |
|
|
3-year fix |
4.19% |
£495 |
75% |
|
|
5-year fix |
4.29% |
£1,499 |
65% |
|
|
5-year fix |
4.59% |
£999 |
65% |
|
|
5-year fix |
4.69% |
£995 |
75% |
17 top variable deals
|
LENDER |
DEAL |
RATE |
FEE |
MAX LTV |
|
2-year tracker |
1.99% (Base + 1.49) |
£999 |
65% |
|
|
2-year tracker |
2.19% (Base + 1.69) |
£945 |
60% |
|
|
2-year tracker (remortgage only) |
2.19% (Base + 1.69) |
£1,495 |
60% |
|
|
2-year tracker |
2.29% (Base +1.79) |
£99 |
65% |
|
|
Term tracker |
2.29% (Base + 1.79) |
£99 |
60% |
|
|
2-year tracker |
2.29% (Base + 1.79) |
£995 |
60% |
|
|
Term tracker |
2.35% (Base + 1.85) |
£945 |
60% |
|
|
2-year tracker |
2.48% (Base + 1.98) |
£845 |
75% |
|
|
Term tracker |
2.49% (Base + 1.99) |
£599 |
70% |
|
|
2-year tracker |
2.49% (Base + 1.99) |
£945 |
75% |
|
|
Term tracker |
2.49% (Base + 1.99) |
£99 |
65%
|
|
|
Term tracker (remortgage only) |
3.09% (Base + 2.59) |
Fee-free plus £300 cashback |
70% |
|
|
Term tracker (remortgage only) |
3.29% (Base + 2.79) |
Fee-free plus £300 cashback |
75% |
|
|
2-year discount |
2.44% |
£795 |
75% |
|
|
2-year discount |
2.44% |
£495 plus £250 cashback |
75% |
|
|
2-year discount |
2.69% |
£999 |
75% |
|
|
3-year tracker |
2.89% (Base + 2.39) |
Fee-free |
75% |
More: Find a competitive mortgage | The best mortgages are found off the high street! |High interest rates will crash property prices
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At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 8045 or email mortgages@lovemoney.com for more help.
This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article.
Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.