If you take stock of your monthly expenses, you’ll probably see that your mortgage is one of – if not the – most expensive monthly cost. So, it stands to reason that you would want to do everything you can to keep that repayment as low as possible. If you’re approaching the end of your initial mortgage term, you could potentially save thousands of pounds just by finding a new mortgage deal.
Why you can save
Normally, at the end of the initial term with your mortgage provider, they will automatically switch you to their standard variable rate (SVR). Currently, the SVR isn’t sky-high, but with the BoE angling to increase rates this year, that might not be the case for long.
There is a good probability that your new rate will be higher than the rate you signed on with, and you could end up paying double in some cases, compared to if you had switched to a new mortgage deal. The savings each month could add up to thousands of pounds every year, which will be a staggering number by the end of life of the loan.
Why you should remortgage
First and foremost, the biggest reason to remortgage is to secure a lower interest rate. Remortgaging with a new lender boasts the benefits of reducing the length of your mortgage term and lowering your payments allowing you to pay off your balance quicker.
You could also reduce your monthly payment by simply extending the term of your existing mortgage. This isn’t always advised since accrued interest will end up costing you more in the long run.
Even if you’ve diligently made your repayments and have reduced your loan significantly over the years, remortgaging can still be advantageous. Once the majority of your original loan is paid off, you could apply for a lower LTV (loan-to-value) mortgage. Since these types of loans tend to have lower rates, securing a new mortgage deal could help you pay your loans down even more.
If you’re on a variable-rate mortgage, it might be the time to switch to a fixed-rate deal to guarantee a specific monthly payment. Having a fixed payment will help immensely with financial planning and budgeting.
Concerns about remortgaging
Do you want a better mortgage deal, but something is holding you back? If you’ve experienced financial hardships during the pandemic, you might be worried that you’ll be rejected. Or perhaps you think it’s just too much work. Whatever your concern is, a lower monthly mortgage repayment can only help your overall financial situation.
Mortgage advisers can find medical professionals the right mortgage
Professional mortgage advisers can be a fantastic resource as they have relationships with providers and access to special deals – especially if you have specific needs as a doctor or other medical professional. You’ll have assistance throughout the entire process, from paperwork preparation to purchase so not only will you know what’s expected of you, you don’t have to do it alone.
Is it time to switch your mortgage?
If you want to find out if you could save money by switching your mortgage, the experts at Dental & Medical Financial Services can help. We are specialist mortgage providers to the medical and dental sectors who understand your unique requirements and can help you achieve your goals when it comes to property finance.
Dental & Medical Financial Services have been helping doctors and dentists with finding low-cost mortgages for your home and investment properties for over 25 years.
This does not constitute advice. Professional advice should be taken prior to acting on any part of it.
Dental and Medical Financial Services Limited is an appointed representative of Best Practice IFA Group Limited, which is authorised and regulated by the Financial Conduct Authority.