What happens if I see a better mortgage deal or my circumstances change?
Getting a mortgage is going to be one of the biggest financial commitments of your life so we understand how making decisions can be tricky. Read on if you want us to help you out!
If looking for the right home isn’t hard enough, deciding on which mortgage deal takes your fancy can be just as difficult a predicament to overcome. Yet, with so many mortgage deals out there on the market, sticking by any choice you make is going to be tricky. This is why we’re here to help! Over this article, we’re going to show you what mortgage deals you should keep an eye out for! Read on to find out more.
Below we have listed the main types of mortgage products but, what happens if you've chosen say a two-year fixed rate deal at 3% & the lender suddenly releases a 2.5% two-year fixed. If you have already been approved for that lender & you fit the criteria for the new product then it should just be a call to the lender to swap products. They may levy an admin charge but, if the savings are sufficient then, all well & good.
However, if the new lower rate is offered by an alternative lender then it's not such a straight forward decision. Will you be approved by the new lender, if you are purchasing & a valuation has already been completed, chances are you will be paying out for a second valuation. If the saving justifies the effort & expence then the option should be pursued.
Types of Mortgage Deals
Fixed Rate Mortgages
Thinking about a fixed rate mortgage, this can be a great option for first-time buyers and those who want a bit more financial certainty. This is because unlike variable rate mortgages, fixed mortgage rates are… fixed! This means that despite interest rates fluctuating up and down, the rate that you are on will stay the same. This can allow you a lot more breathing space and help you to plan your outgoings more easily as you will know how much interest you will be paying for as long as this fixed term lasts.
The popularity of fixed interest rates doesn’t look like it’s going to falter anytime soon either! In fact the trend sees more & more people opting for a five-year fixed rate over the old favourite two-year fixed rate.
Make sure you’re aware that if you’re going for a fixed rate mortgage deal, they only tend to last for periods ranging up to five years. This is known as an introductory period or an initial rate. Once this introductory period has ended you will switch to your lenders standard variable rate mortgage (more on that later) but, don't fear. Just as you switch credit cards to always ensure you're on the best rates, the same applies to mortgages.
Standard Variable Rate Mortgages
Standard variable rate (SVR) mortgages are extremely common for a lot of homeowners. This is not because there's anything great about SVR mortgages but because the homeowner has come to the end of their offer deal & for one reason or other has never switched to a new deal.
Though, if you have one eye on changing your lender as well as your current mortgage deal then we recommend that you still speak to your lender. It doesn’t have to be a difficult conversation and it’s going to be vital for you to clarify any potential fees that you may be hit with if you were to change lender or mortgage deal!
Tracker Rate Mortgages
Tracker mortgages are usually linked to the Bank of England base rate (BBR)plus a margin. You may secure a deal that is 1% obove BBR. If the Bank base rate was 1.5% then you would be paying 2.5%. A tracker mortgage can be a great option when markets are bouyant or rates are dropping but, if rates look like rising then, each time they do your monthly mortgage payment is going to increase.
What we can do at Mortgages Online
Look, we know that picking one option from the plethora of mortgage deals out there on the property market isn’t easy. So, that’s why we’re here to help you out! At Mortgages Online we’re all about comparing mortgage deals (only the ones suited to you) across the property market that are being offered by a variety of lenders. We show you mortgage deals that are tailored to you. It’s simple! We’re easy to use and completely free, so no credit card required!