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  • Is It Time To Remortgage? Monthly Repayments Rise Dramatically

Is It Time To Remortgage? Monthly Repayments Rise Dramatically

13 Aug

Mortgage News

According to LMS, the leading provider for conveyancing services within the UK, borrowers in June 2022 who remortgaged found their average monthly repayments jump up by an average of £236. In addition to this, recent statistics by LMS demonstrated that, on average, 52% of borrowers increased their loan amount in June 2022 to £22,644.

If you’re currently considering remortgaging and need advice for your current circumstances, get in touch with our Mortgage Brokers in Northampton today. In the meantime, check out our predictions below for the coming months and what this means for you if you’re considering re-mortgaging.

Why Have Costs Increased?

In June, it was reported that inflation was up by 9.4% (due to rising fuel, supplier, and food prices), setting a new record over the last 40 years. 

Alongside this, the Bank of England lifted the base rate, which is the UK’s official borrowing rate for building societies and banks, for the fifth time in a row since December 2021. As of August 2022, the current Bank of England base rate has increased again to 1.25%, a record high within 13 years. 

What Is The Process Of Remortgaging? 

A remortgage is a process of applying for a new mortgage with a new lender while remaining in your existing home. 

The remortgaging process is similar to applying for your initial mortgage, however, you can get an online Agreement in Principle (AiP) without the need for a full credit check, which confirms the amount a lender is willing to lend you. Once you have an AiP, you can apply for a mortgage.

It is important to check the terms within the documents received from your current lender before making the switch, as some lenders may charge an ‘exit fee’ or additional charges if leaving before the end of your current term. You will also need to consider solicitor fees for transferring your mortgage. For bespoke advice, get in touch with our Mortgage Brokers in Northampton.

How Can I Get The Cheapest Mortgage Rate Possible? 

A recent mortgage survey performed showed that the most popular product chosen by customers was a five-year fixed-rate loan (which was chosen by 67% of customers). Many stated that the main factor in their decision to go for a longer-term mortgage was to take advantage of lower monthly repayments, given the uncertainty of where interest rates could be in the next 12 to 24 months. 

What Does This Mean For Me? Get In Touch Today! 

It is predicted that many consumers will turn to remortgage as a way to offset higher costs of living in the coming months.

Previously, consumers would often remortgage for lower monthly repayments; however, 30% of consumers who remortgaged in June 2022 said that they did so to borrow money. With the fear of recession looming, we predict that this trend will continue in the coming months. 

We know this can be a challenging and uncertain time, but don’t worry – our expert Mortgage Brokers in Northamptonshire are on-hand to help. Contact us today or check out our Remortgage page online for more information on how we can help you.

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