What should you do if you need to remortgage?
Wednesday 18 January, 2023
If your mortgage deal is coming up for renewal in 2023 then contact your Thomas Oliver mortgage broker today on 01707 872000. Looking at other mortgage options rather than just renewing with your current mortgage lender could save you money.
Thomas Oliver reviews the mortgage market to get you the best remortgage deal
Merian Gerova, our Mortgage Adviser in East Finchley, North London said:
“We can review the mortgage market, so you know which mortgage product and rate best suits your circumstances. It’s never too early to organise your remortgage and take advantage of the best product deals and mortgage rates available. If rates improve closer to the end of your current deal you can change the product deal, but by organising a deal now it protects you if rates rise again, as they did in 2022.”
Mortgage rates rose in 2022 but what will happen in 2023?
In August 2022 the average 2-year fixed rate mortgage was 2.52% but this peaked at 6.55% in October 2022 because of the uncertain economic situation. When Rishi Sunak replaced Truss as Prime Minister the new Chancellor Jeremy Hunt introduced a more fiscally responsible budget and the mortgage market stabilised. The average two - and five -year fixed rate deals are now below 6%, and the TSB and Nationwide reduced their five-year mortgage deal in January 2023. Experts believe they will fall throughout the year, stabilising at between 4-6%, as inflation has peaked, and the Bank of England is likely to slow base rate rises this year. Some experts think they could reduce below 4% in 2024 as lenders priced in higher future interest rates under the Truss government, which now might not happen.
Rising mortgage costs for clients remortgaging
Anyone looking to remortgage in 2023 is likely to pay more for their mortgage each month at a time when the cost of living is increasing due to inflation, and rising energy and food costs are an issue for all households. Also, as many people’s wages aren’t keeping up with inflation their take home pay may fall in real terms. This makes it even more important than ever to find the best remortgage deal available, so we recommend taking mortgage and protection advice from your local Thomas Oliver mortgage advisor.
Why take mortgage advice if you are remortgaging in 2023?
You can save time by using a mortgage broker when you remortgage. Mortgage brokers can explain all your remortgaging options and will discuss your spending, outgoings, and future expenses so you get the right remortgage deal. Our Thomas Oliver mortgage broking team understand all the mortgage products available from different mortgage lenders and we can find you the best mortgage for your financial situation. We will save you time, so you don’t apply for mortgage products you are not eligible for. Also given the difficult economic situation you might find that it is best for you to use a specialist lender, but we will review the mortgage market at the time of your enquiry.
Organise your remortgage now as rates could increase again
With mortgage costs rising and incomes stretched and the cost of living increasing prepare for a new mortgage deal at the earliest opportunity. If your current mortgage deal is on a much lower rate, our mortgage advisors are unlikely to recommend starting a new mortgage deal now, but we can work behind the scenes organising your remortgage at least six months before your current deal expires. You will be protected because if rates improve, we can always take advantage of other mortgage deals closer to your renewal date.
Should I get a tracker or a fixed rate mortgage deal?
This is a very difficult question and one that many of our clients are asking us. If you remortgage on a fixed rate deal you will know exactly how much you will pay each month, but better fixed rate deals may be available by 2024. If you can afford to pay the higher repayments in 2023 then you could benefit from taking out a tracker mortgage instead and fix your mortgage if lower rates are available in 2024. The issues are complicated, which is why we recommend you get local mortgage advice, as these are questions you should ask your mortgage broker. If we review your finances, we will be best placed to offer you personalised mortgage advice.
How much more expensive will my remortgage be compared to my exising mortgage deal?
Many of the best remortgage deals often need a maximum loan-to-value ratio of 60% or 65% so if you have more equity in your property our mortgage brokers will be able to organise a better mortgage deal for you. Given the lower mortgage deals that existed pre the pandemic the Office for National Statistics found that anyone now taking on a £300,000 mortgage could pay up to £661 more a month on their new remortgage deal, and the average increase is approximately £250 a month. This means the average remortgage deal is likely to cost you in the region of £3000 a year more from 2023.
In summary…
Anyone remortgaging in the next six to nine months should call our mortgage brokers on 01707 872000 for remortgage advice. Our mortgage broking team works with clients in London, Hertfordshire, Essex, and Bedfordshire.
As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments. The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.
