If you are thinking of remortgaging in the next few months – don’t wait, do it now.
That’s the message from Kevin Roberts, director of Legal & General Mortgage Club, who thinks homeowners are – at this moment -in a great position to take advantage of market conditions and secure a good deal.
He explained there were a couple of reasons for this, one of which is soaring house prices. Double digit annual growth means the equity in many homeowners’ properties will have increased a great deal in the last two years.
Indeed, figures from Halifax show since the start of the pandemic the average home has increased in value by £47,568.
Kevin explained many homeowners will therefore be in a position to move up an ‘LTV band’. LTV or – loan-to-value (LTV) ratio – refers to the proportion of your property’s value you need to borrow.
He said: “It may be you are a few hundred pounds away from being able to change to a 75% LTV band which will mean you can get much better rates. Speak to an adviser as they can help you to achieve this.”
Will the cost-of-living crisis impact my remortgage affordability?
There’s another reason why it’s worth remortgaging now rather than in a few months’ time. The cost-of-living crisis means many of us are noticing a big difference to our day-to-day spending.
From an extra £10 when you fill up your car, to the cost of your supermarket shop going up each week to the knowledge you are going to be paying an additional £600 or more on your heating bill over the year – you will probably be paying out more now than you were when you took out your mortgage.
Although lenders assess living costs when assessing mortgage applications, Kevin explained many had not yet updated their affordability calculators to take the current situation into account.
Therefore, by remortgaging now you can take advantage of a some offers which many not be there in a few weeks.
Kevin added: “Mortgage offers last, in general, for six months. For new builds it might be longer.” So, if your mortgage is due to expire in the next six months you can lock into a better deal whilst conditions are good.
Should I use a mortgage adviser or broker to remortgage?
Kevin’s advice to anyone remortgageing is to speak to a mortgage adviser. He said there are fee-free advisers available but even intermediaries who charge will generally save you more money than it costs to pay for their service.
He added: “If you want to you can speak to more than one adviser to make sure you are accessing as much of the market as possible.”
