20 Jan Review your mortgage
Why it pays to review your mortgage regularly
Is your current mortgage as competitive as a new deal on the market today? You may be able to save hundreds, perhaps thousands, of pounds by shopping around. So, it’s a good idea to review your mortgage at least once a year to check whether you should switch to a better deal.
How often should you review your mortgage?
Ideally you should keep a regular eye out for better mortgage deals.
New mortgage deals are coming on to the market all the time. If you’re not locked in to a fixed or discount rate deal with an early repayment charge, it could be worth your while changing lenders (re-mortgaging) at any time.
At the very least, you should review your mortgage:
- When interest rates change – because this will affect how competitive your current deal is
- When your current mortgage deal comes to an end – as your rate might increase, and
- Once a year if you’re not tied in to a deal with early repayment penalties – to see how your current deal compares to new deals that have come onto the market
If you do nothing when rates change or your mortgage deal ends, you could lose out too many better deals that are available in the market.
Set up a reminder to review your mortgage
Set up a reminder now to review your mortgage once a year, or before your current fixed deal ends. You could save yourself hundreds of pounds!
Set a diary reminder to start shopping around at least three months before your current fixed or discount deal reverts to the lender’s standard variable rate.
How much can you save by re-mortgaging?
When you make the switch, if monthly payments are going to be lower you can choose either to make reduced payments or, better still, stick to your original payments and reduce the mortgage term.
Let’s say you have £175,000 still to repay on your mortgage with a remaining term of 20 years. You’re on a 3% deal repaying £1,115 a month.
This means more competitive deals are now available to you and, if you reviewed your mortgage today, you might be able to switch to a much cheaper deal of just 2%.
Use the link to check your property value and see what you might save by re-mortgaging to a lower rate.
However, before making any switch always check what fees you’ll have to pay – MDFS Mortgages can help you with this.