5 Reasons Why You Should Review Your Mortgage Before It’s Too Late

10/11/2021

1. The Bank of England base rate is staying put…for now

After 18 months of the current rock bottom 0.1% rate, the feeling within financial markets is growing that a rate rise is inevitable either side of Christmas. The Monetary Policy Committee will once again sit down to decide the base rate on December 16th, so if you have a mortgage coming up for renewal or you’re looking to buy – the next 5 weeks could possibly be the last chance to secure an incredible deal before the pressure of inflation forces the hand of Andrew Bailey & Co.

2. The lowest mortgage rates have already started to disappear

Low mortgage rates are still on offer, but they are moving away from the record lows seen in recent months. There were previously 82 mortgages on the market with an interest rate of 0.99% or lower, but according to Defaqto, as of October 25th that dropped to just 22 products available, and more rates have disappeared since.

3. Your Standard Variable Rate could be costing you thousands of pounds

Around 1.1 million mortgages across the UK are currently sat on a standard variable rate (SVR), a rate of interest set individually by lenders. SVR’s currently range anywhere between 3.35% - 7.05%, meaning over a million people each and every month are paying hundreds of pounds more than they could be if they secured themselves a fixed term deal instead.

4. House prices are up, which means a better loan-to-value

Nationwide’s house price index reported a 9.9% annual rise in prices in October – this means homes up and down the country have shot up in value over the past 12 months, making the loan-to-value (LTV) percentage on many mortgages much lower if you’ve continued to repay the debt throughout the pandemic. A reduction in LTV could very well put you into a lower bracket of interest rates and onto a better deal next time around.

5. It’s good news for First Time Buyers

Whilst most sub-1% interest rates have disappeared, these deals would often be unavailable, or unattainable, to First Time Buyers (FTB) who tend to be putting down 5, 10 or 15% deposits to get on the housing ladder. As lenders have returned to these product ranges with more and more confidence since almost vanishing 18 months ago, the competition for business continues to increase and interest rates are reducing as a result.