The Bank of England’s holding down of interest rates has been a saving grace for many people with a mortgage, particularly for those whose mortgage is directly linked to the Bank of England’s Base Rate – still currently 0.5%.
Actions to take:
1. Find out what your interest rate is. If it is 3.0% or less, you are likely to be best off by staying as you are. However, if you find that you are paying 4.5% or more, then you are likely to be on the lender’s Standard Variable Rate (SVR). If this is the case, you should contact us to make enquiries on your behalf. Mortgage rates are particularly low at this time, and it is possible to move over to a better rate and also fix it – against the time when interest rates do go up. Such changes can often be done for very little cost and produce a significant saving in monthly payments.
2. Check if your mortgage is on an interest-only or a repayment (capital and interest) basis. If you have an interest-only mortgage, you should look at your options as regards moving on to a repayment basis. This can be done with your present lender. The mortgage will have to be repaid at some time and unless you have another strategy, you should make these enquiries.
We will be happy to assist.
Tip: Interest rates currently are tiered, i.e. the interest rate is lower when the deposit is higher. For example, if you have only a 10% deposit, the interest rates are high. With a 15% deposit they are lower. With a 20% deposit still lower, and so on until the very best rates are for those having to borrow less than 50% of the property value. The same tiers also apply when you are remortgaging. In some cases you can save money by taking out a personal loan to bring you down to the next interest rate level. It can work out as a lower cost even when having to pay both the mortgage and the loan.
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