There’s a lot to be said for having confidence in the market and it seems that at the moment both buyers and lenders alike are feeling enthused. Following the stable election outcome it’s arguably the time to spring clean your finances and fix your mortgage. We’re advising a lot of our enquiring clients to act quickly to secure the best remortgage deals as mortgages have never been so affordable.
Why not take a ten-year fix?
Your house is your biggest asset and if you really want to plan for the future sometimes it’s nice to know exactly what your outgoings will be. A ten year commitment seems like a long time but if you intend to stay in your house and want to manage your finances then perhaps it is an idea to consider.
The best remortgage deals that we’ve seen in years have appeared on the market lately and it’s definitely an idea to discuss what you want to do with a broker. By solidifying your plans you will be protected from rate hikes and any nasty surprises the future might hold.
Why act now to get the best remortgage deals?
The other key advantage with settling on a fixed rate is that interest rates have never remained unchanged for the duration of a parliament since just after the Second World War. The Bank of England base rate has been at the historic low of 0.5 per cent for five years. The consensus amongst financial analysts is that it will be at least the second month of next year before it increases – this means that the next six to eight months should deliver some interesting remortgage deals.
However, if you want to refinance now remember there is only so much lower that rates are able to go. You will, no doubt, have heard that on the high street five year fixed rate deals have fallen below 2 per cent and some two year fixed rate deals are edging towards one per cent. These fixed periods offer an enticing middle-ground. There are some similarly low, bespoke rates available with the private banks too, for the right clients.
Another option if you want to draw equity is to consider a second charge mortgage. This is, essentially, a second loan on the same property. You might be advised to take out a second charge mortgage by your broker if you want to keep your property at a rate that you would not qualify for under new affordability rules – for example, an interest-only, cheap tracker. However, this exemption is only applicable until next April when (under new EU rules) second charge loans will be subject to new assessment rules and checks.