I’ve been approached by quite a few clients lately – old and new – who have been keen to explore their best remortgage options with me over the next few months.
One case which I think that clients can particularly relate to is a “like-for-like remortgage” in which a new client came to me wanting to refinance as he had just reached the end of the term of his 2.89% fixed interest only mortgage.
Before coming to me my client had been to his existing lender to check what the SVR would be if he were to stick with them. At 2.5% it was better than he thought but he had decided to talk to Enness as a whole of market broker in order to double check that there were not any improved best remortgage solutions available to him.
My client was fairly flexible but he was most interested in anywhere between 3 to 5 year fixes. He was willing to explore his options as long as he found the best remortgage solution according to what he could afford. His budget was £2200 per month but he was happy to spend more if I could justify the long term-savings of a deal which stretched that.
His house was worth £1.8 million and the mortgage was £500,000. His income was c. £150,000 per annum and was almost doubled by his bonus. He furthermore had an ISA worth £200,000.
Bearing this all in mind I took into consideration my client’s budget and the fact that he was not averse to part interest and part interest only in order to find the best remortgage options.
I decided that I would offer my client three different best remortgage options so that we could talk through the pros and cons of each one together and work out which one was best suited to him:
- The Best Remortgage Option for the Cheapest Rate – This solution was on a three year fixed basis of 2.59%, interest only in part and offset.
- The Best Remortgage Option for a Five Year Fixed Rate at 3% with £200,000 of the sum as interest only.
- The Best Remortgage Option for a Five Year Fixed Interest Only Rate at 3.29%.
After I had presented these varying best remortgage solutions my client decided on the third option. In this case this approach worked well for my client as I didn’t want to push him down a set route without giving him choice.
Due to rate wars once we applied for the mortgage the 5 year fixed rate had reduced to 2.89%. Therefore the best remortgage actually resulted in him keeping his monthly repayments down to £1,373 per month which was well below his budget. The lender was from the highstreet and consequently also didn’t require AUM which suited him very well.